Mahanagar Telephone Nigam Limited has disclosed significant defaults in principal and interest payments to multiple banks, totaling ₹9,188 crore as of February 28, 2026. The state-owned telecommunications company informed BSE and NSE about these defaults in compliance with SEBI regulations on March 16, 2026.

Default Details Across Seven Banks

The company has defaulted on obligations to seven major banks, with varying dates when accounts were classified as Non-Performing Assets (NPAs). The defaults represent a comprehensive breakdown in the company's debt servicing capabilities across its banking relationships.

Timeline of Financial Distress

The NPA classification dates reveal a progressive deterioration in MTNL's financial position. Union Bank of India was the first to classify the account as NPA on August 12, 2024, followed by other banks through February 2025. Indian Overseas Bank was the latest to classify the account as NPA on February 3, 2025.

Comprehensive Debt Structure

MTNL's total financial indebtedness extends far beyond bank borrowings, reaching ₹36,216 crore. This substantial debt burden comprises multiple components that highlight the company's complex financial obligations.

Regulatory Compliance and Disclosure

The disclosure was made pursuant to Regulation 30 of SEBI (LODR) Regulations, 2015 and SEBI Circular dated November 21, 2019. This represents a continuation of regular monthly disclosures, with the company having previously reported defaults in multiple communications throughout 2024, 2025, and 2026. The systematic reporting demonstrates ongoing compliance with regulatory requirements despite the financial challenges.

The current default amount of ₹9,188 crore represents the total outstanding borrowings from banks and financial institutions, indicating that the entire banking debt portfolio has been affected by payment defaults. Company Secretary Ratan Mani Sumit signed the disclosure document digitally on March 16, 2026.

Mahanagar telephone nigam Limited (MTNL) has disclosed to stock exchanges its inability to fund the escrow account for the upcoming semi-annual interest payment on its Bond Series VII E, marking a significant development in the state-owned telecom company's financial obligations.

Bond Payment Details

The company informed BSE and NSE on March 13, 2026, that it could not fund the escrow account for the 6th semi-annual interest payment related to its 7.75% MTNL Bond Series VII E. The payment details are as follows:

Structured Payment Mechanism

Under the Structured Payment Mechanism established through a Tri-Partite Agreement (TPA), MTNL is required to fund the semi-annual interest into the escrow account maintained at Bank of India with adequate amount 10 days before the due date. The TPA involves three key parties:

• MTNL
• Department of Telecommunications (DoT), Ministry of Communications, Government of India
• Beacon Trusteeship Limited

The company cited insufficient funds as the primary reason for its inability to meet this funding requirement ahead of the March 24, 2026 due date.

Sovereign Guarantee Protection

Despite the funding shortfall, MTNL emphasized that all bonds issued by the company carry sovereign guarantee backing from the Government of India. The company outlined the guarantee mechanism in its disclosure:

In case of any default by MTNL in payment of principal and interest on the bonds, the sovereign guarantee can be invoked by the Debenture Trustee, obligating the Government of India to make the payment on behalf of MTNL.

Regulatory Compliance

The disclosure was made in compliance with Regulation 30 of SEBI (LODR) Regulations, 2015, ensuring transparency with stakeholders regarding the company's inability to meet its funding obligations. Company Secretary Ratan Mani Sumit signed the official communication to both stock exchanges, requesting them to take the information on record.

This development highlights the ongoing financial challenges faced by the state-owned telecommunications company while emphasizing the protective framework provided through government backing for bondholders.