MTNL denies delisting buzz after rumours lift stock 19.88%

New Delhi: State-run MTNL today said there are no plans to delist its shares from the stock exchanges. “It is stated that as far as MTNL is concerned no such proposal has been under consideration of the board,” MTNL said in a clarification to BSE after its stock price surged on reports of delisting.[caption id=“attachment_2069915” align=“alignleft” width=“380”]  Representational image. Reuters[/caption] The MTNL stock was up 19.88 percent to Rs 19.90 apiece in the afternoon trade. Meanwhile telecom secretary Rakesh Garg said during an event here that any decision on BSNL, MTNL merger will be taken after studying the Indian Institute of Management (IIM) committee report, which is likely to be submitted shortly. The Department of Telecom (DoT) had asked IIM Bangalore to prepare a feasibility report on merger of state-run BSNL and MTNL. Garg said DoT will take 4-5 months to study the report and then take a call on the merger. In a bid to revive BSNL and MTNL, DoT is taking various initiatives as both the state-run companies have been making losses and losing market share to private telecom operators. BSNL had incurred Rs 7,019 crore loss in 2013-14, Rs 7,884 crore in 2012-13 and Rs 8,850 crore in 2011-12, whereas MTNL had reported a loss of Rs 5,322 crore in 2012-13 and Rs 4,109 crore in 2011-12. The revenue has declined for reasons including fixed to mobile substitution leading to surrender of wireline connections, delay in expansion of GSM capacity, perceived poor quality of customer services and high reduction in income from sources other than services. The expenditure of these firms has increased because of legacy workforce whose salary and wages are more than 50 percent of revenue, increasing repair and maintenance costs and high interest burden in case of MTNL. The government has taken several measures to bring the two state-run companies out of financial distress. The measures include treatment of pensionary liabilities of government employees absorbed in MTNL who opted for combined service pension on parity with similar employees in BSNL, waiver of government loan to BSNL involving an amount of Rs 1,411 crore and financial support of Rs 492 crore to MTNL towards payment of minimum alternate tax. PTI