State-run telecom firm Mahanagar Telephone Nigam Ltd (MTNL) has found itself in fresh financial trouble after it told stock exchanges that it has failed to pay back loans and interest worth nearly Rs 8,585 crore to seven public sector banks, reported The Economic Times.

BIG DEFAULT, FALLING SHARES

In a filing on Tuesday, MTNL confirmed that it has defaulted on both principal and interest payments to a group of lenders, which include some of India’s biggest state-owned banks.

Soon after the news came out, MTNL’s shares dropped sharply by 4.80% to close at Rs 49.59, falling by Rs 2.50 during the day.

WHO MTNL OWES

The company’s filing named Union Bank of India, Bank of India, Punjab National Bank, State Bank of India, UCO Bank, Punjab & Sind Bank, and Indian Overseas Bank as the banks affected by the missed payments. According to MTNL, these defaults have piled up between August 2024 and February 2025.

Rs 7,794.34 crore is the principal amount that MTNL has not repaid, and another Rs 790.59 crore is pending interest. Among the lenders, Union Bank of India tops the list with Rs 3,733.22 crore outstanding, followed by Indian Overseas Bank at Rs 2,434.13 crore.

DEBT PILE KEEPS GROWING

MTNL has been struggling with huge debt for years. The company said its total debt now stands at around Rs 34,484 crore. This includes not just bank loans but also sovereign-guaranteed bonds worth Rs 24,071 crore and Rs 1,828 crore borrowed from the Department of Telecommunications to pay interest on these bonds.

The latest default comes as another blow for the loss-making telecom PSU, which has been trying to stay afloat amid rising competition and falling revenues. While the government has been extending financial support, MTNL’s rising debt burden shows how tough its road to recovery remains.

– Ends