Mahanagar Telephone Nigam Ltd

Rating disclosure

• India Ratings and Research Pvt Ltd issued its press release on MTNL bonds dated August 18, 2026.
• The filing is a SEBI LODR compliance disclosure under Regulation 30 and 51.

Penalty details

• TRAI's 17 August 2026 order imposes a Rs 12 lakh penalty on MTNL.
• Penalty relates to contravention of QoS Regulations 2024 for Access Service (Wireline) in Q4 March 2026.
• There is no material impact on MTNL's finances or operations.

Appointment details

• Shri Shyamal Misra appointed MTNL Government Nominee Director effective 08 July 2026
• Appointed by Government of India under DoT order
• Not debarred from holding director office per SEBI or other authority
• Qualifications: BTech IIT Kanpur; MPA Harvard Kennedy School
• Experience: IAS officer; various central/state posts; currently Additional Secretary, DoT
• Board attendance: 1 of 1 meetings since appointment
• Terms per Department of Telecommunications letters

Financial performance

• Standalone net revenue from operations ₹200.08 crore; total income ₹274.61 crore.
• Standalone loss after tax ₹841.07 crore; basic EPS ₹(13.35).
• Consolidated net revenue from operations ₹216.89 crore; total income ₹292.04 crore.
• Consolidated loss after tax ₹842.36 crore; basic EPS ₹(13.37).
• DSCR 0.06x and ISCR 0.06x for the quarter.
• Standalone net worth negative ₹30,801.34 crore; incipient sick CPSE noted.
• Total debts to total assets: 3.49x standalone; 3.47x consolidated.
• BSNL revenue share recognised in quarter: ₹34.39 crore; SLA implies EBITDA-neutral operations.
• Asset monetization via DIPAM yielded ₹418.76 crore in FY25-26; balance properties ongoing.
• 3G spectrum: revenue ₹3.88 crore; carrying value ₹690.27 crore; impairment testing not performed.
• DoT recoverables ₹690.41 crore; DoT payables ₹1,118.69 crore; net payable ₹428.28 crore.
• ECL provision on long-outstanding balances ₹186.03 crore; impact not quantified.
• Ind AS 116 non-compliance issues flagged; impact not quantified.
• Manual billing in Mumbai/Delhi units noted; revenue/receivables impact not quantified.
• Standalone EPS (basic) ₹(13.35); Consolidated EPS ₹(13.37).

Liquidity & going concern

• Auditors flag going-concern risk due to negative net worth and loan defaults; government support deemed essential.
• Government support includes sovereign-backed bonds and soft loans; network upgradation funding mentioned.
• Revenue-sharing with BSNL is intended to be EBITDA-neutral; quarterly recognition of ₹34.39 crore under SLA.
• Asset monetization of land/buildings yielded ₹418.76 crore in FY25-26; further monetization in process.
• Consolidated and standalone results include several contingent items and disputed receivables/payables.
• Auditors’ conclusion stated as not modified in the context of the noted qualifications.

Capex, capacity & working capital

• Monetization program supported by DIPAM; net monetization proceeds ₹418.76 crore in FY25-26.
• DoT/BSNL balances and recoverables indicate working-capital headwinds and reconciliation risk.
• Total outstanding debt ₹9,495 crore; defaulted principal ₹2,196 crore and interest ₹1,701 crore.
• Total financial indebtedness ₹37,223 crore (bank loans + SG bonds + DoT loan).
• Government-backed financing for interest on sovereign bonds noted; no interest provision recognized.

Segments & business model

• Standalone segment revenue: Basic & other services ₹69.96 cr; Cellular ₹3.88 cr; Infrastructure Leasing ₹126.53 cr; Net ₹200.08 cr.
• Standalone segment profit before tax: Infra Leasing positive ₹101.71 cr; others negative.
• Consolidated segment revenue: Basic & other services ₹69.96 cr; Cellular ₹20.69 cr; Infra Leasing ₹126.53 cr; Net ₹216.89 cr.
• Consolidated segment profit before tax: net loss ₹105.06 cr across segments.

Court order on land acquisition deposit withdrawal

• High Court order permits withdrawal of ₹20.53 crore deposited by MTNL towards compensation.
• Order date: 7 August 2026.
• Withdrawal relates to MTNL property at Pahadi, Goregaon East, Mumbai.
• Balance of interest remains payable and to be paid within three weeks.
• Withdrawn amount remains subject to final outcome of MTNL's appeal.
• Deposited by MTNL as acquiring body.
• Disclosure is filed under SEBI LODR regulations.
• Company will make further disclosures as required under SEBI LODR.
• Interest component amount not specified.

Default details

• Nature of obligation: Principal and Interest Payment.
• Lenders: UBI, BOI, PNB, SBI, UCO, PSB, IOB.
• Disclosure date: 31-07-2026.
• Total principal amount of obligation: Rs 9,575 crore.
• Total outstanding borrowings from banks/financial institutions: Rs 9,575 crore.
• Total financial indebtedness: Rs 37,396 crore.
• UBI: default 12-08-2024; current default 4,178.74 cr; principal 3,334.57 cr; interest 844.17 cr.
• BOI: default 04-09-2024; current default 1,260.92 cr; principal 999.54 cr; interest 261.38 cr.
• PNB: default 09-09-2024; current default 432.16 cr; interest 92.05 cr.
• SBI: default 28-09-2024; current default 313.90 cr; interest 77.81 cr.
• UCO: default 28-09-2024; current default 245.83 cr; interest 54.52 cr.
• PSB: default 08-10-2024; current default 205.79 cr; interest 37.45 cr.
• IOB: default 03-02-2025; current default 2,300.00 cr; interest 412.89 cr.
• Total current defaults: Rs 9,574.61 crore; principal Rs 7,794.34 crore; overdue interest Rs 1,780.27 crore.
• Material updates: no insolvency, restructuring, or legal proceedings disclosed.

Appointment of Government Nominee Director

• Appointment of government nominee director Shri K Balaji in MTNL effective 08.07.2026.
• Shri K Balaji is Joint Secretary, Administration, DoT, appointed by Government of India.
• Not debarred from director office by SEBI or any authority.
• Serves as MTNL Audit Committee Chairman and Stakeholder Relationship Committee member.
• Holds nil shares in MTNL.
• Terms and conditions per DoT appointment letters.
• Appointment complies with Regulation 30 of SEBI LODR Regulations, 2015.

Escrow funding update

• Escrow funding for MTNL Bond Series VIII A completed on 17 July 2026.
• Escrow maintained with Bank of India for debt service.
• Interest due date for 6th semi-annual payment is 20 July 2026.

Defaults to banks and indebtedness

• Nature of default: principal and interest payment.
• Banks involved: UBI, BOI, PNB, SBI, UCO, PSB, IOB.
• Date of default: 12-08-2024 (UBI), 04-09-2024 (BOI), 09-09-2024 (PNB).
• Further defaults: 28-09-2024 (SBI), 28-09-2024 (UCO), 08-10-2024 (PSB), 03-02-2025 (IOB).
• Current default per bank: UBI O/s 4,144.46 cr, principal 3,334.57 cr, interest 809.89 cr.
• BOI default: O/s 1,249.46 cr, principal 999.54 cr, interest 249.92 cr.
• PNB default: O/s 520.18 cr, principal 432.16 cr, interest 88.02 cr.
• SBI default: O/s 388.37 cr, principal 313.90 cr, interest 74.47 cr.
• UCO default: O/s 298.13 cr, principal 245.83 cr, interest 52.30 cr.
• PSB default: O/s 204.11 cr, principal 168.34 cr, interest 35.77 cr.
• IOB default: O/s 2,690.62 cr, principal 2,300.00 cr, interest 390.62 cr.
• Total current default: O/s 9,495.33 cr, principal 7,794.34 cr, interest 1,700.99 cr.
• Total principal amount of the obligation: Rs 9,495 crore.
• Total outstanding bank borrowings: Rs 9,495 crore.
• Total financial indebtedness: Rs 37,223 crore (banks, SG bonds, DoT loan).
• Disclosure date: 30-06-2026.