Financial news worsens for India’s MTNL

Details: Vaughan O'Grady; Category: Operators; 16 July 2025; 5210 views

Indian state-owned operator Mahanagar Telephone Nigam (MTNL) is apparently sinking further into a financial quagmire. It has reportedly informed India’s stock exchanges that it has defaulted on payments of both principal and interest to a group of public sector banks.

The total overdue amount stands at nearly INR85.85 billion (just under a billion US dollars at present exchange rates). Not surprisingly, the announcement quickly hit MTNL shares, which fell 4.8% after the announcement.

The beleaguered company has said its debtors included Union Bank of India, Bank of India, Punjab National Bank, State Bank of India, UCO Bank, Punjab & Sind Bank, and Indian Overseas Bank. Union Bank of India (owed in the region of US$434 million and Indian Overseas Bank (about US$283 million) appear to be the institutions hardest hit by the announcement. MTNL has said the defaults span from August 2024 to February 2025.

India’s Economic Times news service says MTNL’s total financial debt, which includes loans from banks, sovereign guaranteed bonds, and borrowings from the Department of Telecommunications (DoT), stands at a startling INR344.8 billion (a little over US$4billion).

This includes bank loans and sovereign-guaranteed bonds along with about US$212.4 million borrowed from the Department of Telecom (DoT) to service interest on those bonds.

This isn’t the first bad financial news from MTNL this year. We reported in April that MTNL had defaulted on loan repayments of about US$971.5 million to multiple banks.

The other government-run operator, BSNL, seems to be enjoying better fortunes, as we reported in early July. However, given that MTNL is much smaller – its service area appears to encompass telecommunication services in the two metropolitan cities of Delhi and Mumbai – it’s hard to see how it will pay off its debts, let alone operate profitably.

So far there appears to be no official comment from the government on the latest MTNL issues, or indeed any indication of how it plans to manage them.