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Shares of Mahanagar Telephone Nigam Ltd. (MTNL) surged by 20% to Rs 57.21 during morning trade on Wednesday; Key points for investors
MTNL Shares
Shares of Mahanagar Telephone Nigam Ltd. (MTNL) surged by 20% to Rs 57.21 during morning trade on Wednesday, February 5, following increased optimism surrounding the company’s asset monetization plans for FY26. This rally followed a 7% gain in the previous session, breaking a two-day losing streak.
The surge was sparked by comments from Arunish Chawla, Secretary of the Department of Disinvestment and Public Asset Management (DIPAM), during CNBC-TV18’s Budget 2025 Verdict discussion. Chawla reiterated the government’s commitment to supporting MTNL and BSNL in monetizing their assets to unlock value, clear liabilities, and revitalize the sector.
“We are going to assist MTNL and BSNL in monetizing their assets so that the value locked in can be redeployed, liabilities cleared, and the sector re-energized,” he stated.
MTNL, which has been weighed down by significant debt, was categorized as a Non-Performing Asset (NPA) by most state-owned banks in October last year. Additionally, Finance Minister Nirmala Sitharaman’s Union Budget 2025 speech introduced a new initiative aimed at providing broadband connectivity to select government schools and health centers.
This positive news boosted the entire telecom sector, with the BSE Telecom index rising 1.4% to 2,806.
However, despite the renewed focus on the telecom sector, the Indian government’s telecom revenue is expected to fall by over 33% to Rs 82,442.84 crore in FY26, down from Rs 1,23,357.20 crore in the current fiscal year, according to budget documents. This sharp decline comes despite anticipated payments from telecom operators for deferred spectrum and adjusted gross revenue (AGR) dues after the moratorium concludes in September 2025.
The government’s earnings from the telecom sector primarily stem from license fees and spectrum usage charges (SUC), both of which are linked to telcos’ AGR. Operators pay 8% of their AGR as license fees, while SUC, which had previously been around 3-4%, has now fallen below 1% after the removal of the 3% floor and the waiver on SUC for spectrum acquired post-July 2022. Revenue from captive telecom networks is derived from fixed license fees and a nominal one-time entry fee.
As of around 10:20 am, MTNL shares were trading at Rs 56.6 on the NSE, up 18.8% from the previous close. The stock has gained over 17% in the past three months.
