Shares of state-owned loss-making telecom firm Mahanagar Telephone Nigam Ltd soared as much as 15 per cent on Thursday, after a media report that the government has a revival plan in place.
India has drawn up a package worth nearly Rs 1,30,000 crore to revive state-run telecom companies Mahanagar Telephone Nigam and Bharat Sanchar Nigam Ltd, according to news agency NewsRise.
The proposed details are expected to be floated in the cabinet next month, the agency reported, citing a senior government official aware of the development.
“The cash component in package would be Rs 25,000 crore-Rs 30,000 crore, the news agency reported citing the official, adding that there would also be issuance of preferential shares to the government.
The development comes after the government deferred, earlier this year, the merger of the two state-owned companies due to financial reasons, according to local media reports.
The remainder of the package would be split into about Rs 50,000 crore of spectrum payment dues and 360 billion rupees of pending adjusted gross revenue payments, according to the NewsRise report.
The company, set up in 1986 by the Indian government, posted a loss of Rs 653 crore for the quarter ended Sept. 30, up from Rs 583 crore a year ago.
MTNL’s shares rose 15 per cent to Rs 20.70 in their biggest intraday rise since March 10 and have so far gained 30.4 per cent this year.
The company’s total debt stood at Rs 25,615 crore, at the end of financial year March 31, 2021.