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Informist, Wednesday, Jun. 4, 2025

 

--Govt source: Plan to sell BSNL, MTNL assets worth INR 55 bln to lower debt

--Govt source: Plan to sell MTNL, BSNL land assets worth INR 10 bln in FY26

--Govt source: Funds from asset sale to help BSNL, MTNL improve fincl health

By Priyasmita Dutta

 

NEW DELHI – The Ministry of Finance and the Department of Telecommunications have finalised a plan to monetise non-core assets worth about INR 55 billion belonging to Mahanagar Telephone Nigam Ltd. and Bharat Sanchar Nigam Ltd., a senior finance ministry official said. The move is aimed at helping the debt-ridden companies raise funds through the sale of land assets identified by the Department of Public Enterprises, the official said.

 

According to the plan, MTNL is likely to sell land worth about INR 45.75 billion and BSNL about INR 9 billion. The land assets belonging to the state-owned telecommunication companies will be sold over many years, the official told Informist. The government hopes to monetise assets worth INR 10 billion in 2025-26 (Apr-Mar), the official said. "In the subsequent years, government may target monetising INR 20 billion, and then INR 15 billion, or vice versa, depending on the response and market conditions," the official added. 

 

The Department of Public Enterprises has already identified some properties of BSNL which will be part of the monetisation plan. MTNL's case is a bit more cumbersome, considering the company's debt is higher than BSNL's and the properties have more legal complexities, including concerns about structural conditions as many properties date back to the 1990s. 

 

"Most MTNL properties are office properties, whose valuation is bigger than commercial properties and that delays the process as well," the official said. However, the government has a list of MTNL properties that can be monetised considering their commercial viability. 

 

Legal complexities, legacy issues, and lack of clearance from state governments have been at the heart of the Centre's limited success in land asset monetisation so far. The government has been trying to sell non-core assets of public sector undertakings to monetise assets with little or no business activity. The push to monetise these unused assets also stems from the government's difficulty in pushing ahead privatisation and disinvestment of state-owned entities.

 

The government had formed the National Land Monetization Corp., a special purpose vehicle, in 2022 to undertake monetisation of surplus land and assets of public sector enterprises. In April, National Land Monetization Corp invited bids from international property consultants to carry out the valuation of land parcels of BSNL in five southern cities – Kozhikode and Ernakulam in Kerala, Nandi Nagar in Hyderabad, and Bengaluru and Mangaluru in Karnataka. Informist had in April reported that the government expected BSNL to raise around INR 3 billion from the sale of these five properties. 

 

The government wants to help BSNL and MTNL raise money to improve their financial condition, the official said. Both the companies struggle with rising operational costs, declining subscriber base, and mounting debt. As on Mar. 31, MTNL's total debt obligations were over INR 335 billion, with loan defaults amounting to INR 83.46 billion across seven public sector banks. BSNL, on the other hand, had a debt burden of nearly INR 233 billion as on Mar. 31, 2024. 

 

The government has already taken various measures to revive the two companies. In 2019, the first revival package amounting to around INR 690 billion was announced to bring down the operating costs of BSNL and MTNL. Then, in 2022, a second revival package amounting to a whopping INR 1.64 trillion was approved, focusing on infusing fresh capital, restructuring debt, and viability gap funding for rural telephone operations, among others. 

 

After these initiatives, BSNL has reported a profit in the Oct-Dec and Jan-Mar quarters, the first profit in 18 years. The company reported a net profit of INR 2.80 billion for the March quarter, and a profit of INR 2.62 billion for Oct-Dec. For the full year, however, BSNL posted a net loss of INR 22.47 billion.

 

MTNL's finances continue to dwindle, with a net loss of INR 8.27 billion for the March quarter and a loss of INR 33.02 billion for FY25. "The net worth of the company has been fully eroded. The company has incurred net cash loss during the year ended March as well as in the previous year and the current liabilities exceeded the current assets substantially," the telecommunications company's management had said in an exchange filing, detailing the financial results. At 1024 IST, shares of the company were at INR 49.46, flat from the previous close.  End

 

Edited by Avishek Dutta

 

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