MTNL approves reduction in employee cost by offering Voluntary Retirement Scheme

Mahanagar Telephone Nigam on Monday approved the proposal of reduction in employee cost of the company by offering Voluntary Retirement Scheme (VRS) substantially on Gujarat Model (with reduced Ceiling of Ex-Gratia) to its employees (both Executives and Non executives).

The company said in an exchange filing that those aged 45 and above could opt for voluntary retirement. This has been done to make organisation lean and also reduce the staff costs, the release added.

Recently, MTNL, which has struggled with financial difficulties, informed the exchanges that it failed to fund the semi-annual ESCROW deposit for its 6.85% MTNL Bond Series VI, due on December 21, 2024.


MTNL remains majority-owned by the government. It has yet to release an official statement regarding the implementation of its much-discussed revival plan.

At least half a dozen lenders have classified loans to Mahanagar Telephone Nigam (MTNL) as non-performing assets (NPA) in August, prompting the state-run telecom utility to propose a debt recast plan, ET had earlier reported.

The company has offered payment of 40% of dues, which lenders rejected, stating that a 60% haircut from a sovereign-like company is very steep, the people said.

The government-owned telco, which earlier had a monopoly on fixed-line connections in Delhi and Mumbai and is still classified a ‘Navratna’ company, failed to regularise the miss-payments to Union Bank of India, Bank of India, Punjab National Bank, State Bank of India, UCO Bank and Punjab and Sind Bank.

MTNL has missed ₹518 crore in principal and interest payments on outstanding borrowing of ₹7,925 crore. The total financial indebtedness is ₹31,996 crore, according to a stock exchange disclosure.

It reported a consolidated loss of ₹3,269 crore in FY24 on the back of ₹789 crore in revenue and ₹2,689 crore as finance cost. To revive the company, the cabinet approved a plan which mandated the company to monetise surplus land and building assets to repay debt and for capital expenditure, according to the company's annual report for FY24. However, the monetisation process has been slow, bankers said.