Mahanagar Telephone Nigam Ltd (MTNL) informed the exchanges on December 12, 2024, that it could not fund its semi-annual ESCROW account deposit due to insufficient funds.
The deposit, linked to the 6.85% MTNL Bond Series VI (INE153A08097), is due on December 21, 2024. According to the Tripartite Agreement (TPA) between MTNL, the Department of Telecommunications (DoT), and Beacon Trusteeship Limited, the telecom firm was required to deposit the amount 10 days before the due date.
MTNL clarified that while it faced a shortfall in funds, all its bonds carry a sovereign guarantee from the government. This ensures that the government will cover principal and interest payments in case of default. The process for invoking this guarantee is detailed in the TPA filed with BSE during the bond listing.
As of December 12, 2024, MTNL share price is trading at ₹61.76, marking a 13.53% increase (₹7.36) from the previous close. The day began with an opening price of ₹54.25 and surged to a high of ₹61.80, showing significant intra-day strength.
Over the past 5 days, MTNL has recorded a notable gain of 22.61% (₹11.39), while the past month has seen the stock appreciate by an impressive 30.54% (₹14.45). Over the last year, MTNL’s stock has nearly doubled with a 92.21% increase (₹29.60), and the five-year performance is staggering, with a 647.88% rise (₹53.45), highlighting its long-term value creation for shareholders. MTNL’s 52-week range spans from ₹29.55 to ₹101.93.
For Q2 FY25, MTNL reported a net loss of ₹888.41 crore, widening from ₹771.82 crore in the previous quarter (Q1 FY25). Revenue also dipped to ₹158.80 crore, compared to ₹169.40 crore in the preceding quarter.
Although reports in October 2024 suggested a possible revival plan for the struggling telecom PSU, no official confirmation has been released so far.
Mahanagar Telephone Nigam Ltd (MTNL), established in 1986 as a public sector enterprise, was tasked with delivering high-quality telecommunication services in India’s major metropolitan regions, including Delhi and the National Capital Region (NCR), as well as Mumbai and Thane district. The company aimed to offer world-class telecom solutions to its customers at affordable rates. In recognition of its significant contributions and strategic importance, MTNL was awarded Navratna status in 1997, highlighting its strong position among public sector undertakings in India.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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