CRISIL continues MTNL's rating on 'Watch Negative'
The rating watch impacts investor confidence and the company's ability to raise funds.
The rating watch is negative, and there's concern about adherence to structured payment mechanisms.
* CRISIL has continued its rating on the long-term debt facilities of Mahanagar Telephone Nigam Ltd (MTNL) on 'Rating Watch with Negative Implications'. * The rating was placed on negative watch on September 11, 2024, following the non-adherence to the structured payment mechanism for government-guaranteed bonds. * While the structured payment mechanism specifies the account should be funded by the T-3 date by the guarantor (the Government of India), there was a delay of 1-2 days in funding the designated account beyond the T-3 date. * Crisil Ratings has noted the consistent adherence to the trustee-administrated structured payment mechanism towards timely funding of the designated escrow account by the government towards payments for governement-guaranteed bonds. * Crisil Ratings has observed that for all the subsequent interest payments (from the rating rationale dated September 11, 2024, where ratings were placed on watch negative), there has been adherence to the stipulated structured payment mechanism as per the timeline defined in the bond documents. * MTNL’s operating revenue declined to ₹66 crore in the first quarter of fiscal 2026 from ₹184 crore in the corresponding quarter of the previous fiscal. As a result, the operating loss widened to ₹186 crore from ₹111 crore. * Crisil Ratings continues to endeavor to contact the representatives of the Department of Telecommunications to understand their perspectives on adherence to the structured payment mechanism, but notes adherence to structure for the past 24 instances.
What to do with a filing like this
Mahanagar Telephone Nigam Limited filed this with the NSE as a statutory disclosure, categorised under credit ratings. It is a primary document, not a recommendation, and the desk marks it medium impact: worth reading, rarely worth acting on by itself.
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See the model portfoliosA plain-language summary of a public exchange filing by Mahanagar Telephone Nigam Limited. Read the original for the full detail.