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MTNL share price climbs to 7-year high. Why the stock is surging

MTNL share price has been climbing new highs as street is buzzing with news of telecom company mulling to monetize its assets to raise funds, say stock market analysts. (MINT) — MTNL share price has been climbing new highs as street is buzzing with news of telecom company mulling to monetize its assets to raise funds, say stock market analysts. **(MINT)**

1 min read . Updated: 28 Dec 2021, 12:29 PM IST Asit Manohar

MTNL share price has shot up from around ₹18 to ₹38.95 levels, logging near 120 per cent rise in last one month

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Mahanagar Telephone Nigam Ltd or MTNL share price today climbed to its 7-year high hitting 10 per cent upper circuit in early morning session. MTNL shares have been in 'uptrend' for last one month. In last one month, MTNL share price has shot up from around ₹18 to ₹38.95 levels, logging near 120 per cent rise in this period. However, stock market experts are still bullish on the counter as there are speculations that company is mulling to monetize its assets to raise funds.

Speaking on the reason for rise in MTNL share price; Avinash Gorakshkar, Head of Research at Profitmart Securities said, "MTNL shares have been climbing new highs as street is buzzing with news of telecom company mulling to monetize its assets to raise funds. It is expected that the fund raised through asset monetization will be used to repayment of its debt."

Commenting upon the monetary liability of MTNL; Saurabh Jain, Assistant Vice President — Research (Retail Equities) at SMC Global Securities said, "The state-owned telecom company is under ₹18,000 crore loss and its current debt is around ₹25,000 crore leading to near ₹43,000 crore net monetary liability. If we look at the market capital of MTNL, it stands at around ₹2450 crore." He said that it is buzz of asset monetization that has lifted the morale of investors.

The government has listed for sale real estate assets of state-run telecom firms MTNL and BSNL at a reserve price of around ₹970 crore, according to documents uploaded on the DIPAM website.

"This is the first stage of asset monetisation at MTNL and BSNL. Bids have been invited for BSNL assets worth ₹660 crore and MTNL assets worth ₹310 crore. We plan to complete the entire process within one-and-half months," BSNL Chairman and Managing Director P K Purwar told PTI.

Non core asset monetisation commences with the first set of six properties of BSNL/ MTNL bid out on the MSTC portal. Link of the portal can be accessed at https://t.co/Kq452WOFfC pic.twitter.com/KKsaIEyah8
— Secretary, DIPAM (@SecyDIPAM) November 20, 2021

On what chart pattern suggests in regard to MTNL shares; Sumeet Bagadia, Executive Director at Choice Broking said, "MTNL shares have given breakout at ₹38 levels and it may go up to ₹50 in short term. One can buy the counter at current levels and hold for ₹50 target maintaining stop loss at ₹30 levels."

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