MTNL Shares Surge 16% Following ₹2,135 Crore Asset Monetization

Shares of Mahanagar Telephone Nigam (MTNL) surged over 16% on March 13 following the government's disclosure in Parliament that the company had generated ₹2,134.61 crore from the monetization of land and building assets as of January 2025.

Government's Update on Asset Monetization

Minister of State for Communications, Pemmasani Chandra Sekhar, informed the Lok Sabha on March 12 that state-run telecom firms BSNL and MTNL have collectively earned ₹12,984.86 crore from asset monetization since 2019. BSNL, in particular, has secured ₹2,387.82 crore through the monetization of its land and buildings.

According to Sekhar’s written reply, BSNL and MTNL are only monetizing land and building assets that are not required for operational purposes in the foreseeable future and for which they have ownership transfer rights. Additionally, BSNL and MTNL have earned ₹8,204.18 crore and ₹258.25 crore, respectively, from the monetization of tower and fiber assets during this period.

"Asset monetization is being carried out in line with the approved government policy, and its impact on public sector undertakings (PSUs) is being closely monitored," Sekhar stated.

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MTNL’s Financial Struggles and Market Performance

Despite the substantial gains on March 13, MTNL shares remain significantly lower than their 52-week high of ₹101.93, recorded in July last year. The stock is still near its 52-week low of ₹31.20 per share, having declined over 16% in the past six months.

MTNL, which is struggling with substantial debt, has been categorized as a Non-Performing Asset (NPA) by several state-owned lenders in 2024. The telecom company's deteriorating financial position has raised concerns about its long-term viability.

Analysts have pointed out that despite the positive impact of asset monetization, MTNL continues to face challenges such as high debt, declining subscriber base, and increased competition from private telecom players like Reliance Jio, Bharti Airtel, and Vodafone Idea.

Government's Focus on Telecom Sector and Revenue Decline

In her Budget 2025 speech, Finance Minister Nirmala Sitharaman announced a new initiative to expand broadband connectivity to select government schools and health centers. The government has been actively working on improving telecom infrastructure, particularly in rural and remote areas, to bridge the digital divide.

However, despite the government's continued focus on the telecom sector, telecom revenue is projected to decline by over 33%—from ₹1,23,357.20 crore in the current fiscal to ₹82,442.84 crore in FY26—according to budget documents. This sharp drop in revenue comes despite the upcoming payments from telecom operators for deferred spectrum and adjusted gross revenue (AGR) dues once the moratorium ends in September 2025.

Industry experts believe that one of the reasons for the revenue decline is the government’s relief measures for telecom companies, which allowed them to defer spectrum payments and AGR dues. While this has provided short-term relief to struggling telecom firms, it has also impacted immediate government revenue.

Future Prospects for MTNL

MTNL’s ability to generate sustainable profits and reduce its debt burden will be crucial for its long-term survival. Experts suggest that the company may need additional government support, restructuring measures, or a merger with BSNL to remain competitive in the evolving telecom landscape.

As of now, the stock’s volatility continues, with investors closely monitoring further developments in asset monetization and government policies aimed at reviving the struggling telecom PSU.