Government’s Decision to Sale MTNL Assets
The government of India has decided to sell real estate assets of state-owned telecom firms MTNL and BSNL. The reserve price would stand at Rs. 970 crores. MTNL has been running at a loss of Rs. 18,000 crores along with a current debt of Rs. 25,000 crores. Consequently, this state-owned entity is a Rs. 43,000 crores liability right now.
Experts feel that the news of asset monetisation has boosted investors’ morale.
According to reports, the government has already started the first stage of asset monetisation of both BSNL and MTNL. This process might take up to one and a half months to wrap up.
MTNL Stock Performance
As mentioned, MTNL shares have been following an upward move since the last month. Although shares have touched Rs. 38 level, experts believe there’s more room for the stock to rise. MTNL shares have the potential to go as high as Rs. 50 in the short term. Investors can buy the share at the current level and hold it till it reaches the level of Rs. 50.
As of 9:45 am on Wednesday, 29 December 2021, MTNL shares were trading at Rs. 40.85. This is Rs. 1.90 up from Rs. 38.95 as registered on Tuesday.
Some experts also claim that this rise in MTNL shares can be partly attributed to the Department of Telecom’s announcement to roll out 5G in 2022. It has declared that the government plans to launch 5G services in 13 major cities of India by 2022.
MTNL plans to use proceeds obtained from its asset sale to repay a portion of its debt. The speculation of asset sale along with the news of the 5G rollout will push MTNL shares higher in upcoming days.
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Frequently Asked Questions
How much MTNL assets would be sold off in the first phase of asset monetisation?
MTNL assets worth Rs. 310 crores are to be auctioned during the first phase of asset monetisation.
What was MTNL share price on 27 December 2021 Monday?
MTNL shares traded at a year-high price of Rs. 35.45 on Monday.
What is the current market capitalisation of MTNL?
The current market capitalisation of MTNL stands at Rs. 2,450 crores.
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.