Shares of state-owned telecom provider Mahanagar Telephone Nigam Ltd (MTNL) surged 19.2% on Wednesday, closing at ₹56.8 on the Bombay Stock Exchange (BSE). The rally followed reports confirming government approval for the monetization of MTNL’s assets worth ₹16,000 crore, a move aimed at easing its heavy debt burden and supporting operational restructuring.
According to CNBC Awaaz, Telecom Minister Jyotiraditya Scindia announced that MTNL’s operations had officially merged with Bharat Sanchar Nigam Ltd (BSNL) as of January 1, 2025. Talks with the Ministry of Finance regarding the monetization of MTNL’s land assets to reduce its debt have also advanced significantly.
MTNL has been grappling with a severe debt crisis. As of August 30, 2024, its total outstanding debt stood at ₹31,944.51 crore. The company recently defaulted on a ₹1,000 crore loan repayment to the Bank of India and missed instalments totaling ₹5,726.29 crore owed to lenders such as Union Bank of India, State Bank of India, Punjab National Bank, and UCO Bank.
The government’s asset monetization strategy aims to unlock value from underutilized public sector assets to generate funds for infrastructure development. Finance Minister Nirmala Sitharaman, in the Union Budget 2025, outlined an ambitious Asset Monetization Plan 2025-30, targeting ₹10 lakh crore in revenue from asset sales. This builds upon the success of the 2021 asset monetization programme, which raised ₹2.3 lakh crore against a target of ₹2.5 lakh crore during 2021-23 and ₹1.56 lakh crore against a ₹1.8 lakh crore target in 2023-24.
In a CNBC interview, Minister Scindia revealed that approvals from the National Land Monetization Corporation (NLMC) were in their final stages. Discussions with the Department of Investment and Public Asset Management (DIPAM) and the Ministry of Finance are ongoing to fast-track the process. Additionally, a Group of Ministers has approved measures to resolve land-related disputes with the Delhi Development Authority (DDA), including issues around composition fees and ground rent. Resolving these matters is expected to facilitate the smooth sale of MTNL’s valuable properties.
Market analysts view the asset monetization approval as a transformative step for MTNL, potentially alleviating its financial distress and enabling a more efficient operational framework.
