MTNL fails to repay ₹8,659cr, adds pressure on PSU banks
What's the story
Indian government-owned Mahanagar Telephone Nigam Limited (MTNL) has defaulted on principal and interest payments to several banks. The total outstanding borrowings from banks and financial institutions stand at a whopping ₹8,659 crore. The company revealed the information in an exchange filing today. The lenders include several public sector banks such as Union Bank of India, Bank of India, Punjab National Bank (PNB), State Bank of India (SBI) and UCO Bank, among others.
Debt composition
Total financial indebtedness of the company
MTNL's total financial indebtedness stands at ₹34,577 crore. This includes bank loans of ₹8,659 crore, SG Bonds worth ₹24,071 crore, and a loan from the Department of Telecommunications (DoT) for paying SG Bond interest amounting to ₹1,921 crore. The company has defaulted on both principal installments and interest payments to the aforementioned banks.
Concerns
MTNL's debt crisis deepens
MTNL's longstanding financial distress exerts mounting pressure on both the telecom public sector undertakings and the banking sector. Despite previous government-led revival attempts, including asset monetisation and potential operational mergers, the fresh default underscores the urgency of structural reforms or relief measures. Analysts warn that unless addressal is swift, systemic risks may escalate. With its inability to service key loans, the firm may face stricter regulatory intervention or demand tailored restructuring frameworks.