MTNL defaults on ₹8,585 cr loan repayments to seven PSU banks, shares fall nearly 5%: Report
New Delhi: State-run telecom operator Mahanagar Telephone Nigam Ltd (MTNL) is facing renewed financial distress after informing the stock exchanges that it has defaulted on repayments of loans and interest totalling nearly ₹8,585 crore owed to seven public sector banks, according to The Economic Times.
In a regulatory filing on Tuesday, MTNL disclosed that it had failed to meet both principal and interest obligations to a group of lenders comprising some of the country's largest state-owned banks.
Following the disclosure, MTNL’s stock tumbled 4.80%, closing at ₹49.59 — down ₹2.50 from the previous session.
The banks named in the filing include Union Bank of India, Bank of India, Punjab National Bank, State Bank of India, UCO Bank, Punjab & Sind Bank, and Indian Overseas Bank. MTNL stated that the defaults had accumulated over the period from August 2024 to February 2025.
Of the total outstanding amount, ₹7,794.34 crore is unpaid principal, while ₹790.59 crore pertains to interest. Among the affected lenders, Union Bank of India is owed the largest sum at ₹3,733.22 crore, followed by Indian Overseas Bank with ₹2,434.13 crore.
MTNL has been burdened with significant debt for years. The company noted that its total debt now amounts to ₹34,484 crore.
This figure includes sovereign-guaranteed bonds worth ₹24,071 crore and ₹1,828 crore borrowed from the Department of Telecommunications to service interest payments on those bonds.
The latest default marks another setback for the loss-making telecom PSU, which has been struggling to stay afloat amid intensifying competition and declining revenues.
While the government has extended financial assistance in the past, MTNL’s mounting debt highlights the challenges that continue to threaten its recovery.
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