MTNL Stock Faces Pressure After SBI Classification as NPA
MTNL Stock Update: SBI's NPA Declaration
Shares of Mahanagar Telephone Nigam Limited (MTNL) fell to a 5 percent lower circuit after being classified as a non-performing asset (NPA) by the State Bank of India (SBI), which stated that MTNL's total debt now stands at Rs 325.53 crore. This follows similar downgrades from Punjab National Bank (PNB) and other public sector banks.
Details of the Debt Crisis
In a letter to MTNL, SBI cited overdue payments on a term loan that became overdue as of June 30, 2024, leading to the NPA classification effective September 28, 2024.
- Outstanding debt to SBI: Rs 325.52 crore
- Overdue payments: Rs 281.62 crore
- Impending legal actions if payments aren’t made
MTNL's Financial Troubles
MTNL's total debt has risen to Rs 31,944.51 crore as of August 30, 2024, with defaults on various loans amounting to Rs 422.05 crore. Shares were recently locked at Rs 52.09 on the NSE, marking a 57 percent rise since the year started, but this NPA classification presents a significant risk to its share price.
Next Steps for MTNL
SBI has requested information on MTNL’s land monetisation plan to assess if proceeds could be used to repay the loans. MTNL must substantiate its financial strategies to avoid further decline in its stock performance amidst the ongoing debt crisis.
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This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.