23 April 2025
State-owned Indian telecom operator Mahanagar Telephone Nigam Limited (MTNL) has defaulted on over INR83 billion in loan repayments to multiple banks, including Union Bank of India, Bank of India, and Punjab National Bank, among others. The default encompasses both principal and interest payments.
This significant default, coupled with earlier classifications of MTNL's accounts as non-performing assets (NPAs) dating back to August and September 2024, signals a deepening financial crisis for the company. Union Bank of India is the largest creditor, owed over INR36 billion. Other major creditors include Indian Overseas Bank (approximately US$278 million) and Bank of India.
MTNL's overall financial burden is substantial, with total indebtedness, including short- and long-term liabilities (bank loans, Sovereign Guarantee Bonds, and a loan from the Department of Telecommunications), estimated at nearly INR335.7 billion. This figure underscores the severity of the financial challenge, despite the company's land and building asset monetisation efforts since 2019.
The situation is further complicated by the government's recent announcement of no plans to privatize either MTNL or the larger BSNL, which currently manages MTNL's core operations in Delhi and Mumbai. This lack of privatization strategy leaves MTNL facing an uncertain future, despite several government-led revival efforts, while operating at a consistent loss.
