 "BSNL, MTNL")
Prasad said pursuant to policy formulated by the government to permit sharing of infrastructure by Telecom Service Providers, BSNL and MTNL are also monetising their tower assets by permitting sharing of their towers with other TSPs.
Shares of Mahanagar Telephone Nigam Limited (MTNL) hit an over 13-year high at Rs 54.89, as they rallied 12 per cent on the BSE in Tuesday’s intra-day trade amid heavy volumes. The buying at the counter was attributed to reports that the government was considering the option of handing over operations of telecom company to Bharat Sanchar Nigam Limited (BSNL). A final call on this is likely to be taken in a month’s time.
The stock of telecom – cellular & fixed line services provider was trading at its highest level since January 2011. In the past four trading days, it has surged 31 per cent. The stock has recovered 68 per cent from its previous month low of Rs 32.70 touched on June 6.
At 10:39 am; MTNL was trading 11 per cent higher at Rs 54.44, as compared to 0.20 per cent gain in the BSE Sensex. The average trading volumes at the counter jumped nearly three-fold. A combined 40.12 million shares changed hands on the NSE and BSE.
The BSE has sought a clarification from Mahanagar Telephone Nigam Ltd on July 15, 2024, with reference to news appeared on an online business portal, quoting “New Delhi: The government is considering the option of handing over operations of Mahanagar Telephone Nigam Ltd (MTNL) to BSNL through an agreement, instead of pursuing a merger route, a source privy to the development said. A final call on this is likely to be taken in a month’s time”. The reply was awaited.
Meanwhile, on July 11, 2024, MTNL disclosed to the exchanges that it could not fund the escrow account for the payment of semi-annual interest on the series VIII-A bonds, as per the structured payment mechanism for the bonds, due to insufficient funds.
The payment of semi-annual interest on series VIII-A bonds is due on 20 July 2024 and as per the structured payment mechanism, the designated trust and retention account is to be funded by MTNL 10 calendar days i.e. (T-10)th day prior to the due date, to the tune of the interest and/or principal obligations on the bonds.
MTNL, a public sector enterprise, is engaged in providing telecom services in the geographical area of Mumbai and Delhi. MTNL is one of the two state-owned telecom service providers in India, alongside BSNL. The Government of India (GoI) holds majority stake in MTNL (56.25 per cent as on March 31, 2024), and the balance is held by the public.
MTNL enjoys a ‘Navratna Status’ that gives greater autonomy to central public sector enterprises (CPSEs) in their investment and capital expenditure (capex) decisions. Such a status also aims at facilitating expansion of its operations, in domestic and global markets.
In October 2019, keeping in mind the legacy and the strategic importance of MTNL, the GoI announced revival plan for MTNL and BSNL and continued to support the company’s funding requirements through issuance of the LoC. To make the public sector units (PSUs) financially viable, the Union Cabinet approved the second revival plan for BSNL and MTNL (the telcos) amounting to Rs 1.64 trillion on July 27, 2022. The revival plan is aimed at upgrading services, rolling out 4G services, augmenting the telecom network, and de-stressing balance sheets.
As BSNL is handling MTNL’s operations, fund infusion per revival package has taken place in BSNL, which is managing combined capex for the telcos. The progress on the monetisation of certain identified land assets of MTNL has also been slow, which has since been transferred from the Department of Investment and Public Asset Management (DIPAM) to the Department of Public Enterprise (DPE), according to CARE Ratings.
First Published: Jul 16 2024 | 11:24 AM IST
