MTNL Shares Fall 6% After Company Defaults on Bank Loan Repayment Again
Mahanagar Telephone Nigam Limited (MTNL), a state-owned telecommunications company, has recently faced significant financial difficulties, leading to a 6% drop in its share prices. This decline follows the company’s disclosure of defaulting on substantial bank loan repayments.
Financial Distress and Loan Defaults
MTNL has defaulted on bank loans amounting to ₹8,346.24 crore from seven public sector banks, as per a regulatory filing dated April 19, 2025.This default is part of a broader financial struggle, with the company’s total debt reaching ₹33,568 crore.
The company’s financial woes are not new. In August 2024, MTNL defaulted on bank loan payments worth ₹422.05 crore, comprising ₹328.75 crore in principal and ₹93.3 crore in interest. These repeated defaults have raised concerns about the company’s ability to manage its debt obligations.
Impact on Share Prices
The financial instability has directly impacted MTNL’s stock performance. The company’s shares have experienced significant volatility, with a notable 6% drop following the recent default announcement. This decline reflects investor concerns over MTNL’s financial health and future prospects.
Government Intervention and Future Outlook
In response to MTNL’s financial challenges, the Indian government has taken steps to support the company. This includes providing funds to cover interest payments on sovereign guarantee bonds and considering the transfer of MTNL’s business to Bharat Sanchar Nigam Limited (BSNL).
Despite these efforts, the company’s future remains uncertain. The repeated loan defaults and mounting debt raise questions about MTNL’s long-term viability and the effectiveness of government interventions.
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