MTNL Bonds Rating Remains on 'Watch Negative' by CRISIL
CRISIL Ratings has continued its rating on MTNL's bonds and NCDs on 'Rating Watch with Negative Implications'. The watch was initially placed due to non-adherence to the structured payment mechanism for government-guaranteed bonds. While adherence has improved, future non-compliance could lead to a downgrade.
The continued 'Watch Negative' status indicates potential for a downgrade, which could affect investor confidence and the company's ability to raise further debt. However, the government guarantee provides some mitigation.
The rating remains on 'Watch Negative' due to past instances of non-adherence to the structured payment mechanism and the company's NPA status with Bank of India, indicating ongoing financial risks.
Mahanagar Telephone Nigam Limited (MTNL) has announced that CRISIL Ratings Limited has continued its rating on the company's bonds and non-convertible debentures (NCDs) on 'Rating Watch with Negative Implications'. This rating action, dated May 27, 2026, follows a previous placement on watch negative on September 11, 2024, due to non-adherence to the structured payment mechanism for government-guaranteed bonds.
Specifically, there were delays in funding the designated account beyond the stipulated T-3 date by the Government of India, despite the ultimate payment to investors being met on the due date. While MTNL has since shown consistent adherence to the trustee-administered structured payment mechanism for subsequent interest payments, the non-adherence to the timeline poses a risk. CRISIL Ratings will continue to monitor adherence to the T-structure payment mechanism, and any future instances of non-adherence may lead to a downgrade.
Furthermore, MTNL's loan account with Bank of India, where its escrow accounts are maintained, slipped into non-performing account (NPA) status on September 4, 2024. However, CRISIL understands that the operational status of the escrow accounts will not be impacted. The rating continues to be supported by the unconditional and irrevocable guarantee from the Government of India and the trustee-administered payment mechanism. The unsupported rating for MTNL remains 'Crisil D' due to continuing delays in servicing of debt since June 2024 on non-guaranteed facilities.
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.