MTNL shares close up 16% on buzz of merger talks with BSNL
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New Delhi: Shares of MTNL on Wednesday soared over 8% following reports of a renewed discussion of its merger with BSNL.
After making a positive opening, MTNL’s scrip gained 8% intraday to Rs24.25 on BSE. At NSE, shares of the company surged 8.42% to Rs 24.45.
The rally gathered steam towards the end of the day and the shares closed even higher. The scrip rose 16% to close at Rs26.05 in Mumbai and spiked 15.74% to Rs26.10 on NSE.
After a hiatus of few years, the proposal to merge state-run telecom firms BSNL and MTNL is back on the discussion table with top officials at the telecom department once again ‘brainstorming’ on various options concerning the two loss-making entities.
According to a highly-placed source in the Department of Telecom, a top-level meeting recently discussed possibility of merging both the entities that are facing financial stress due to increasing competition in the sector.
MTNL’s standalone net loss has widened to Rs819.96 crore, surpassing its total revenue, during the three-month period ended 31 December, hit primarily by finance cost.
The net loss surpassed its total income of Rs690.59 crore. The losses of BSNL have, however, narrowed to Rs4,890 crore for the April-December period of the current fiscal, from Rs6,121 crore in the year-ago period.