Mahanagar Telephone Nigam Limited has been fined a total of ₹5.31 lakh by the National Stock Exchange of India and BSE Limited for non-compliance with board composition requirements. The penalties, comprising a basic fine of ₹4.50 lakh and GST of ₹81,000, were imposed on May 27, 2026, for violations of Regulation 17(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company stated that the non-compliance arose because appointments, including those of independent directors, are managed by the Administrative Ministry, specifically the Department of Telecommunications, Ministry of Communications, Government of India.

The exchanges issued separate notices to Mahanagar Telephone Nigam regarding the failure to adhere to the mandated composition of the Board. The fine was calculated at a rate of ₹5,000 per day for a period of 90 days of non-compliance ending in March 2026. While the company acknowledged the imposition of fines, it confirmed that there is no material impact on its financial, operational, or other activities.

Details of Regulatory Violations

The non-compliance specifically relates to Regulation 17(1), which mandates the composition of the Board of Directors. The company disclosed that the matter regarding the appointment of six independent directors has been taken up with the Government of India. Consequently, Mahanagar Telephone Nigam is requesting both NSE and BSE to waive the fines levied.

Waiver Request and Compliance Timeline

In its filing, the company emphasized its status as a Public Sector Undertaking (PSU), noting that it lacks direct control over board appointments. The Department of Telecommunications is responsible for these appointments. Mahanagar Telephone Nigam has formally approached the exchanges to consider a waiver of the penalties based on these administrative constraints.

The exchanges have instructed the company to pay the fines within 15 days of the notice date. Failure to remit the payment could result in action related to the freezing of the promoter's shareholding and other securities. Additionally, the exchanges warned that a second consecutive quarter of non-compliance for specific regulations, including Regulation 17(1), could lead to the transfer of the company to the Z group and potential suspension of trading in its equity shares.

Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE153A01019/8262c8e2f3254b0b.pdf

Mahanagar Telephone Nigam Limited reported a net loss of ₹3,102.94 crore for the fiscal year 2025-26, an improvement from the net loss of ₹3,323.51 crore in the previous year. Revenue from operations for the year stood at ₹817.27 crore, while total income was ₹1,279.75 crore. The company's net worth remained negative at ₹(29,974.84) crore, with current liabilities substantially exceeding current assets as of March 31, 2026.

Financial Performance

For the quarter ended March 31, 2026, the standalone net loss was ₹304.46 crore, with revenue from operations at ₹350.05 crore. On a consolidated basis, the Q4 net loss narrowed to ₹306.95 crore from ₹827.88 crore in the same period of the previous year, while consolidated revenue rose to ₹370.51 crore from ₹275.42 crore year-on-year. The finance cost for the full year was ₹2,982.95 crore, reflecting the significant debt burden carried by the company. The following table summarises the annual standalone financial performance:

Board Decisions

The Board of Directors, in its meeting held on May 21, 2026, approved the audited standalone and consolidated financial results. Additionally, the Board appointed M/s. R.M. Bansal & Co. as the Cost Auditor for the financial year 2026-27 at a remuneration of ₹1,12,100, including GST.

In a key management change, the Board appointed Shri Vasudev Singh, GM (Finance) MTNL CO, as the new Chief Financial Officer (CFO) and Key Managerial Personnel (KMP) effective May 21, 2026. He succeeds Shri Anirudh Prasad Singh, who ceased to be the CFO.

Auditor's Report

The statutory auditors, O.P. Bagla & Co. LLP and S.L. Chhajed & Co. LLP, issued an adverse opinion on the standalone and consolidated financial results. The auditors highlighted that the company's net worth has been fully eroded and it has incurred net cash losses during the current and previous years. Current liabilities substantially exceeded current assets as of the balance sheet date.

The report noted a material uncertainty that may cast significant doubt on the company's ability to continue as a going concern. This is despite the Union Cabinet's approval of a revival plan involving debt restructuring, asset monetization, and a potential merger with BSNL. The auditors also cited non-compliance with certain accounting standards and pending reconciliations with BSNL and the Department of Telecommunications (DoT).