Mahanagar telephone nigam Limited (MTNL) has notified stock exchanges of its inability to fund the escrow account for an upcoming bond interest payment, highlighting ongoing financial constraints at the state-owned telecommunications company.

Bond Payment Default Details

The company disclosed that it could not deposit the required funds for the 6th semi-annual interest payment on its 7.80% Bond Series VIID. The payment structure and timeline are outlined below:

Structured Payment Mechanism

Under the Tri-Partite Agreement (TPA) signed among MTNL, the Department of Telecommunications (DoT), Ministry of Communications, Government of India, and Beacon Trusteeship Limited, MTNL is obligated to fund the semi-annual interest into the escrow account maintained with Bank of India with adequate amounts 10 days before each due date.

The company cited insufficient funds as the primary reason for its inability to meet this funding requirement, representing a significant operational challenge for the government enterprise.

Sovereign Guarantee Protection

Despite the funding shortfall, MTNL emphasized that all its bonds carry sovereign guarantee backing from the Government of India. The sovereign guarantee mechanism provides the following protections:

• Government of India guarantee covers both principal and interest payments
• In case of default by MTNL, the Debenture Trustee can invoke the sovereign guarantee
• Government of India is obligated to make payments to MTNL bondholders upon guarantee invocation
• The invocation process is governed by Tripartite Agreements filed with BSE during bond listing

Regulatory Compliance

MTNL made this disclosure in compliance with Regulation 30 of SEBI (LODR) Regulations, 2015, ensuring transparency with stakeholders regarding the payment default. The notification was simultaneously sent to both BSE Limited and National Stock Exchange of India Limited, where MTNL shares trade under scrip code 500108 and symbol MTNL respectively.

The company's inability to fund the escrow account represents a continuation of financial challenges, though the sovereign guarantee structure provides ultimate payment security for bondholders through government backing.

Mahanagar Telephone Nigam Limited has disclosed significant defaults in bank payments totaling ₹9,115.65 crore as of January 31, 2026. The state-owned telecommunications company informed BSE and NSE about these defaults under SEBI regulations, marking a continuation of its ongoing financial difficulties that have persisted since mid-2024.

Bank-wise Default Details

The company has defaulted on payments to seven major public sector banks, with defaults occurring at different times between August 2024 and February 2025. Union Bank of India represents the largest exposure, followed by Bank of India and Indian Overseas Bank.

Financial Indebtedness Structure

MTNL's total financial obligations extend beyond bank borrowings, encompassing multiple debt categories that highlight the company's comprehensive financial challenges.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 of SEBI LODR Regulations, 2015, and SEBI Circular dated November 21, 2019. This represents the latest in a series of similar disclosures, with previous intimations dating back to July 2024, indicating the persistent nature of the company's payment difficulties.

The company has been regularly updating stock exchanges about these defaults, with communications sent monthly since July 2024. The most recent disclosure covers the period ending January 31, 2026, and was filed on February 11, 2026, by Company Secretary Ratan Mani Sumit.