MTNL stock plunges after SBI labels PSU an NPA amid Rs 325.53 crore debt

About this update from Mahanagar Telephone Nigam Limited

Shares of Mahanagar Telephone Nigam Limited (MTNL) fell to a 5 percent lower circuit after the Central Public Sector Enterprise (CPSE) was officially classified as a non-performing asset (NPA) by the State Bank of India (SBI)India's largest public sector lender stated that MTNL now owed a total of Rs 325.53 crore as of September 30. This declaration follows a similar downgrade by Punjab National Bank (PNB) on September 9 and other public sector banks.In a letter addressing MTNL, SBI wrote, “You have been enjoying credit facilities in the nature of a Term Loan from the bank, with the Term Loan Account Number 367266589**. The instalment and interest payments for this account became overdue as of June 30, 2024, due to non-payment. As 90 days have passed, the account is categorised as an NPA (sub-standard) effective September 28, 2024.”As of September 30, 2024, the total outstanding debt of MTNL to SBI stands at Rs 325.52 crore, with Rs 281.62 crore classified as ‘overdue’. SBI has called for immediate payment of this overdue sum to regularise the account and cautioned that failure to comply would lead to the imposition of a penal interest rate on the outstanding balance.Follow our market blog to catch all the live actionAdditionally, SBI is seeking details on MTNL’s land monetisation plan, which had previously been submitted with detailed year-wise cash flows.The bank asked for the current status of this plan, especially concerning the memorandum of understanding (MoU) signed with NBCC to develop a 13.88-acre land parcel on Pankha Road, New Delhi, for residential and commercial purposes.SBI specifically inquired whether the proceeds from this project would be used to repay outstanding loans.SBI has cautioned that if MTNL fails to meet its payment obligations within the timeframe, the bank will have no choice but to initiate legal proceedings to recover the full loan amount along with interest, and may proceed with ‘enforcement of securities’ without further reference to MTNL.Following SBI’s classification of MTNL as an NPA, other banks such as Union Bank of India and Bank of India have already categorised the company’s debt in the same manner.Also Read | Further 10% correction possible; Nifty likely to end CY24 between 25000 and 27000, say expertsMTNL's financial troubles continue to worsen, with total debt reaching Rs 31,944.51 crore as of August 30, 2024. ...

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