https://indianmasterminds.com

ADVERTISEMENT
ADVERTISEMENT

MTNL Defaults on Rs 343 Cr Bond Interest Due Aug 24; Government Likely to Step In

Debt-Laden MTNL Misses Bond Payment; Govt Backstop to Be Triggered
Indian Masterminds Stories

New Delhi: In a fresh sign of financial stress, state-run telecom operator Mahanagar Telephone Nigam Limited (MTNL) has announced that it will not be able to meet its upcoming bond interest payment scheduled for August 24, 2025, citing insufficient funds.

Interest Payment Default on MTNL Bond Series VIIIB

In a regulatory filing on Thursday, MTNL disclosed that the fourth semi-annual interest payment of 7.61% on its MTNL Bond Series VIIIB cannot be serviced due to a lack of liquidity. The payment, originally due on August 24, is part of a structured repayment mechanism governed by a Tripartite Agreement (TPA) involving MTNL, the Department of Telecommunications (DoT), and Beacon Trusteeship Ltd.

According to the agreement, MTNL is required to deposit the interest amount into an ESCROW account with the Bank of India at least 10 days prior to the due date. However, the company stated:

“Due to insufficient funds, MTNL could not fund the ESCROW account maintained in Bank of India with the adequate amount.”

Sovereign Guarantee May Be Invoked

MTNL has emphasized that all of its bonds, including the Series VIIIB, are backed by sovereign guarantees from the Government of India. As per the terms of these guarantees, in the event of any default on principal or interest, the debenture trustee is required to invoke the guarantee, effectively obligating the central government to make the payment on MTNL’s behalf.

This mechanism ensures that bondholders will not suffer a financial loss despite MTNL’s inability to service the debt.

Another Chapter in MTNL’s Financial Struggles

The development reflects the continuing financial challenges faced by MTNL, which has been grappling with high debt, shrinking revenues, and increased competition from private telecom players. Despite multiple attempts at revival, including government-funded relief packages and voluntary retirement schemes (VRS), the company has yet to return to stable financial footing.

MTNL’s inability to fund the escrow account despite having a scheduled payment highlights the depth of the liquidity crisis it is currently facing.

What’s Next?

While the government’s intervention via the sovereign guarantee will likely prevent immediate repercussions for investors, the default may raise concerns about the long-term viability of the PSU, and could trigger review of its financial restructuring plans by the Department of Telecommunications.

Also Read: MTNL Defaults on ₹8,585 Cr Bank Loans from Seven PSU Banks; Debt Soars to ₹34,484 Cr


Indian Masterminds Stories
ADVERTISEMENT
ADVERTISEMENT
Related Stories
ADVERTISEMENT
ADVERTISEMENT
NEWS
Sanjeev Chaturvedi
IFS Officer Sanjeev Chaturvedi Files Perjury Case Against Cabinet Secretary Over False Affidavit, Alleges Defamation
Ministry-of-Finance
Finance Ministry to Hold Two-Day PSB Manthan from Sept 12 to Drive Next-Gen Banking Reforms
NTPC Green
NTPC Subsidiary NGEL to Build Green Hydrogen Fuelling Station at VOC Port Under New MoU
SECL Star Rating Awards 2025
Two SECL Mines Honoured at Star Rating Awards 2025 for Excellence in Mining Practices
BHEL_resized
BHEL Signs 10-Year Exclusive MoU with Horizon Fuel Cell Technologies to Explore Hydrogen-Powered Trains
Union Minister Sarbananda Sonowal
India’s Cargo Shipments Remain Strong Despite US Tariff; VOC Port Inaugurates Green Hydrogen and Methanol Projects
DGCA_logo
DGCA Proposes Allowing Import of Aircraft Up to 20 Years Old Amid Supply Chain Challenges- Full Details Inside
WAPCOS
WAPCOS CMD Rajni Kant Agrawal Removed for Irregularities, New CMD Announced- Know More
ADVERTISEMENT
ADVERTISEMENT
Videos
IPS Shikha Goel
Decoding Digital Dangers: Insights from IPS Shikha Goel on Cyber Crimes
IPS Mukesh Kumar Bhamoo
Managing Elections, Communal Tensions, and Public Safety – Meet IPS Mukesh Kumar Bhamoo | Video Interview
WhatsApp Image 2025-08-25 at 13.56
Operation Hunt: IPS Dr. Karanraj Vaghela’s Mission to Nab Valsad’s Most Wanted
ADVERTISEMENT
UPSC Stories
Ishwarlal Gurjar UPSC
10th Grade Failure to Indian Police Service: Ishwarlal Gurjar’s UPSC Success Path
Read the inspiring journey of Ishwarlal Gurjar from a small village in Rajasthan to becoming an IPS officer....
IAS Minnu P M
“Lazy, Sleepy, Yet Determined”: Minnu P M’s Honest Take on Cracking UPSC
Minnu PM, once a clerk in Kerala Police, cleared UPSC with AIR 150 after five years of struggle. Her...
IPS Ashish Tiwari
From IIT and Investment Banking to Public Service, Meet IPS Ashish Tiwari 
Ashish Tiwari, IIT graduate and former investment banker, chose public service over global finance. As...
Social Media
IAS Sakshi Sawhney Amritsar DC
Punjab Floods: IAS Sakshi Sawhney’s Emotional Appeal to Elderly Man Wins Hearts, Video of Humanity Goes Viral
Viral Video Captures Emotional Moment as Amritsar DC Shows Sensitivity and Courage Amid Relief Effor...
Masahiro Hara
From Go Board to Global Use, How QR Codes Changed the World: IRAS Officer Ananth Rupanagudi Spotlights Masahiro Hara’s Vision
IRAS officer Ananth Rupanagudi shared a video on Masahiro Hara, the inventor of QR codes, highlighting...
IFS Susanta Nanda Video
A Mother’s Duty: Tigress Watches Over Cubs Splashing in Waterhole — Heartwarming Video Shared By Retd. IFS Officer Susanta Nanda
A tender wildlife video shared by Retd. IFS officer Susanta Nanda shows a tigress keeping watch over...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
Latest
Sanjeev Chaturvedi
IFS Officer Sanjeev Chaturvedi Files Perjury Case Against Cabinet Secretary Over False Affidavit, Alleges Defamation
Ministry-of-Finance
Finance Ministry to Hold Two-Day PSB Manthan from Sept 12 to Drive Next-Gen Banking Reforms
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
Videos
IPS Shikha Goel
IPS Mukesh Kumar Bhamoo
WhatsApp Image 2025-08-25 at 13.56
ADVERTISEMENT
ADVERTISEMENT