MTNL defaults on ₹8,585 cr in loan repayment to 7 public sector banks

Mahanagar Telephone Nigam Limited (MTNL), the government-owned telecom operator, has officially announced a significant default on the repayment of principal and interest on loans totaling ₹8,585 crore as of June 30, 2025. The defaults, affecting multiple public sector banks, comes as the company grapples with the severe financial distress.

According to disclosures made to the stock exchanges, the defaulted amount comprises ₹7,794.34 crore in outstanding principal and ₹790.59 crore in overdue interest. The impacted banks include Union Bank of India (₹3,733.22 crore), Bank of India (₹1,121.09 crore), Punjab National Bank (₹474.66 crore), State Bank of India (₹363.43 crore), UCO Bank (₹273.58 crore), Punjab & Sind Bank (₹184.82 crore), and Indian Overseas Bank (₹2,434.13 crore). The specific default dates range from August 2024 to February 2025.

This latest financial setback adds to MTNL's overall financial indebtedness, which now stands at ₹34,484 crore. This includes the ₹8,585 crore in bank loans, ₹24,071 crore in sovereign-guaranteed (SG) bonds, and ₹1,828 crore in loans specifically taken to cover interest payments on those bonds.

MTNL's exchange filing did not provide any details regarding restructuring or repayment plans, raising further questions about its long-term viability. Amid the disclosure, MTNL's stock closed 4.22% down at ₹49.92 on the BSE today.

The telecom company’s consolidated financial results for Q4 FY25 showed only a marginal improvement on a quarter-on-quarter basis.

Revenue remained flat at ₹170 crore, while the company’s EBITDA loss slightly narrowed to ₹122 crore from ₹128 crore in the preceding quarter. The net loss also eased marginally to ₹828 crore, compared to ₹836 crore in the previous quarter.