MTNL's monthly default letter: ₹9,654 Cr overdue to seven banks — its entire bank borrowing
The 28th such letter since July 2024 lists ₹7,794.34 Cr principal and ₹1,859.91 Cr interest overdue; total indebtedness is ₹37,475 Cr against a market cap near ₹1,559 Cr.
SMALL-CAP
by market cap ≈ ₹1,558.6 Cr
₹9,654.25 Cr
principal + interest, as of Aug 31
₹37,475 Cr
banks + SG Bond + DoT loan
₹24.74
Sep 11 · −46.7% from 52-wk high
₹842.35 Cr
consolidated
₹747.54 Cr
≈3.4× quarterly revenue
On Monday, September 14 at 16:45 IST — after the market close — Mahanagar Telephone Nigam Ltd. filed its disclosure of defaults on loan principal and interest under Regulation 30 of SEBI (LODR) and SEBI's circular of November 21, 2019. The letter states that MTNL has defaulted on payment of principal and interest to seven banks totalling ₹9,654.25 crore — ₹7,794.34 crore of principal and ₹1,859.91 crore of interest. The same filing puts MTNL's total outstanding borrowings from banks at ₹9,654 crore: on the filing's own figures, the company's entire bank borrowing is overdue.
A routine monthly disclosure, updating a default that dates to 2024
Disclosure of defaults on payment of interest / repayment of principal to banks
MTNL disclosed defaults to Union Bank of India, Bank of India, Punjab National Bank, State Bank of India, UCO Bank, Punjab and Sind Bank and Indian Overseas Bank. The disclosure sheet is dated August 31, 2026, and the letter references 27 earlier letters on the same subject going back to July 5, 2024 — this is a monthly series, not a first-time announcement. The filing reached the exchange after Monday's close, so the first session in which it could be traded (September 15) falls beyond this report's price data.
Read:The filing itself is compelled and recurring. What it updates is the scale: ₹9,654.25 crore overdue — equal, per the filing, to MTNL's total outstanding bank borrowings — inside total financial indebtedness of ₹37,475 crore.
BSE filing, Sep 14, 2026The bank-wise detail shows how old these arrears are. Each lender's date of NPA classification — the filing's own column — falls between August 2024 and February 2025. Union Bank of India carries the largest exposure, with ₹4,213.06 crore overdue, followed by Indian Overseas Bank at ₹2,735.35 crore; the two together account for roughly 72% of the overdue total. Interest makes up ₹1,859.91 crore, about 19% of the total — a share that reflects how long the principal has sat unpaid.
Totals per the filing: principal ₹7,794.34 Cr + interest ₹1,859.91 Cr = ₹9,654.25 Cr. NPA dates as stated in the filing.
The bank loans are only the smallest layer of the debt stack. The filing puts MTNL's total financial indebtedness, short-term and long-term, at ₹37,475 crore — roughly 24 times the company's market capitalisation of about ₹1,558.6 crore (63.00 crore shares at the September 11 close of ₹24.74). The filing itemises the stack in one line:
Rs 37,475 crore (Include Bank Loan Rs. 9,654 crore, SG Bond Rs. 24,071 crore and Loan from DoT for paying SG Bond Interest Rs. 3,750 crore)
— MTNL default disclosure, BSE, September 14, 2026
That one line contains the distinction bondholders and shareholders are living with. The bank loans — ₹9,654 crore — are in disclosed default. The bond obligations, by contrast, appear elsewhere in the filing record as being serviced: a July 17 letter disclosed the funding of the sixth semi-annual interest payment for MTNL Bond Series VIII A into an escrow account at Bank of India, and the indebtedness line itself records a ₹3,750 crore loan from DoT taken for paying SG Bond interest. The filings thus show two different treatments of two different creditor classes — bank arrears accumulating while bond interest is funded, in part with fresh government-side borrowing. Whether that split persists is the central question the monthly letters keep updating.
Interest alone runs at three and a half times revenue
Consolidated figures as available in the data; Q4 FY26 consolidated is not in this dataset. Standalone Q4 FY26 showed revenue of ₹350.05 Cr and a net loss of ₹304.46 Cr, with total income of ₹860.50 Cr against that ₹350.05 Cr revenue — a quarter lifted by income other than operations.
The quarterly numbers explain why the default letters keep coming. In Q1 FY27 (results filed August 12), consolidated revenue was ₹216.89 crore while interest expense alone was ₹747.54 crore — about 3.4 times revenue — producing a net loss of ₹842.35 crore. Every consolidated quarter in this dataset shows the same shape: revenue between ₹66 crore and ₹217 crore, interest steady near ₹715–755 crore, and losses of ₹828–960 crore. On this arithmetic, operations do not generate the cash to clear ₹9,654 crore of overdue bank dues. The Annual Report describes two non-operational levers instead: a debt-resolution plan that Union Bank of India, on behalf of the joint lenders, has refused, with MTNL asking the Department of Telecommunications on 22.05.2026 to intervene, extend the escrow agreement, and convene a Committee of Secretaries meeting; and an asset-monetization program that realized ₹419.15 crore in FY2025-26 from two property sales — to NABARD and the Bihar government — with sixteen more properties identified for FY2026-27.
A steady derating into the latest letter
The stock has fallen 22.4% over the sixty sessions shown, from ₹31.87 on June 19 to ₹24.74 on September 11 — five straight down sessions into the filing — and sits 46.7% below its adjusted 52-week high of ₹46.44 (September 17, 2025), 16.4% above the low of ₹21.26 (March 30, 2026). Notably, the previous monthly default letter, filed during the session on August 7, moved the stock +0.4% that day: the market treats these letters as scheduled updates rather than news. Whether the September letter trades the same way cannot be read from this data — its reaction session falls after the last close in the series.
Funding of the 6th semi-annual interest for MTNL Bond Series VIII A into an escrow account at Bank of India, disclosed after close.
Previous monthly default letter (position dated July 31, 2026) filed during the session.
Q1 FY27 results filed after close: consolidated net loss ₹842.35 Cr.
Credit-rating announcement under Regulation 30 (second in August; contents not in this dataset).
C&AG appoints M/s S L Chhajed & Co LLP and M/s S P A R K & Associates as joint statutory auditors for FY 2026-27.
This default letter: ₹9,654.25 Cr overdue to seven banks, filed at 16:45 IST after close.
40th AGM via VC/OAVM; register of members closed September 24–30.
The ownership picture is static: the promoter holds 56.25% (35.44 crore shares), unchanged between March 31 and June 30, 2026; FII holdings slipped from about 31.8 lakh to 24.7 lakh shares over the same quarter, while DII holdings were essentially flat at roughly 8.46 crore shares. The surrounding filings underline the state's operational presence — the Comptroller and Auditor General appoints the auditors, government nominee directors were appointed to the board in August, and the DoT loan sits inside the debt stack. A debt-resolution plan was proposed to the banks but refused by Union Bank of India on behalf of the joint lenders, and MTNL wrote to the Department of Telecommunications on 22.05.2026 asking it to intervene.
The filings that would change this picture
Next monthly letter
The series has run monthly since July 2024 (the last two arrived August 7 and September 14). Watch whether the overdue total moves above ₹9,654.25 Cr — it already equals the disclosed bank borrowing, so growth from here would be accruing interest.
Credit-rating disclosures
Two rating announcements were filed in August (Aug 19 and Aug 27) whose contents are not in this dataset; the next one is the outside read on the debt position.
Bond-servicing letters
Escrow-funding disclosures like the July 17 letter for Bond Series VIII A show whether the bond leg of the ₹37,475 Cr stack continues to be serviced while bank dues stand.
40th AGM, September 30
The Annual Report already discloses a stalled debt-resolution plan and an asset-monetization program; the AGM on September 30 is the next scheduled venue for shareholders to press for an update on either.
Q2 FY27 results
Whether interest expense holds its ₹715–755 Cr quarterly run rate against revenue near ₹200 Cr — the arithmetic that produces the defaults.
The September 14 letter is routine in form — the 28th in a compelled monthly series — but the position it updates is not small: every rupee of MTNL's ₹9,654 crore bank borrowing is overdue, the underlying NPA classifications date to 2024 and early 2025, and the quarterly P&L shows interest expense near ₹750 crore against revenue near ₹200 crore, leaving no operational path to repayment visible in these numbers.
What the filings show alongside the arrears is a split between creditor classes: bond interest funded through escrow, with a ₹3,750 crore DoT loan taken for that purpose, while bank dues accumulate. Holders weighing the stock at 46.7% below its 52-week high are effectively weighing how, and on whose terms, that split gets resolved — a question the Annual Report answers only partially: a debt-resolution plan was offered to the banks and refused by Union Bank of India on behalf of the joint lenders, and remains unresolved.
Informational and educational content only. Not investment advice.