MTNL's Over Rs 8,500-Crore Default: Union Bank Of India To PNB — A Look At PSU Lenders' Exposure

Mahanagar Telephone Nigam Ltd. has defaulted on a staggering Rs 8,584.9 crore as of June 2025 in principal and interest payments to seven public sector banks, according to its exchange filing on Tuesday.

The company’s financial year 2024 annual report paints a grim picture, admitting that MTNL’s existing network has become obsolete, leaving it technologically outdated and commercially unviable in a competitive telecom market. Over the past 10 years, MTNL has reported a cumulative net loss of Rs 29,100 crore, reflecting sustained operational decline.

MTNL’s total debt load is estimated at Rs 32,200 crore, out of which Rs 24,100 crore are sovereign-backed bonds with coupon rates ranging from 7% to 8.25%, placing a heavy interest burden on the company’s already strained finances.

Efforts are underway by the government to revive MTNL, including a land monetisation plan aimed at raising funds through asset sales. However, progress has been slow and uncertain, and delays continue to erode the company’s financial stability.