MTNL shares freeze at 5% lower circuit on loan default; firm will declare Q1 results next week

Shares of Mahanagar Telephone Nigam Limited (MTNL), a wholly-owned subsidiary of Bharat Sanchar Nigam Limited (BSNL), were locked in a lower circuit limit of 5% at ₹67.82 apiece on the BSE on Tuesday, August 6. The stock slumped as the state-owned telecom company defaulted on bank loan payments worth ₹422.05 crore, a regulatory filing said on Monday.

The total default amount comprises ₹328.75 crore of default on the installment of principal and ₹93.3 crore towards interest on debt for June and July.

According to the details shared by MTNL, it has defaulted on the payment of ₹155.76 crore on debt raised from Union Bank of India, ₹140.37 crore from State Bank of India, ₹40.33 crore from Bank of India, ₹40.01 crore from Punjab & Sind Bank, ₹41.54 crore from Punjab National Bank, and ₹4.04 crore from UCO Bank.

The telecom firm earlier raised ₹5,573.52 crore in debt from these banks.

Separately, the government, in the Budget, has proposed to allocate ₹3,668.97 crore for the payment of the principal amount of MTNL bonds.

MTNL Q4FY24 Results

The company reported a widening of losses to Rs 817.58 crore in the fourth quarter ended March 31, 2024, mainly on account of high finance costs. The company had recorded a loss of Rs 745.78 crore in the same period a year ago.

The finance cost of the loss-making telecom PSU increased to ₹688.93 crore from ₹640.91 crore a year ago. The revenue from operations fell by about 5% to ₹192.66 crore during the reported quarter from ₹202.35 crore in the March 2023 quarter, PTI reported.

The company is slated to declare its June quarter (Q1 FY25) results on August 13. 

MTNL share price performance

Shares of the company have jumped nearly 60% in the past month and 226% in the last 12 months.