MTNL gains on buzz GoM OKs spectrum refund

MTNL rose 4.76% to Rs 16.08 at 12:19 IST on BSE on reports the Group of Ministers has decided to refund the money paid by the company for surrendering broadband wireless access spectrum.

Meanwhile, the BSE Sensex was up 33.15 points, or 0.17%, to 19,815.03.

On BSE, 19.76 lakh shares were traded in the counter compared with average volume of 5.36 lakh shares in the past one quarter.

The stock hit a high of Rs 16.42 and a low of Rs 15.41 so far during the day. The stock hit a record low of Rs 9.71 on 20 August 2013. The stock hit a 52-week high of Rs 42.10 on 17 September 2012.

The stock had outperformed the market over the past one month till 12 September 2013, rising 15.67% compared with the Sensex's 4.41% rise. The scrip had, however, underperformed the market in past one quarter, sliding 19% as against Sensex's 3.89% rise.

The small-cap company has an equity capital of Rs 630 crore. Face value per share is Rs 10.

The Group of Ministers (GoM), headed by Finance Minister P. Chidambaram, on Thursday, 12 September 2013, reportedly decided to refund over Rs 11000 crore to MTNL and unlisted BSNL, the two state-run players, for returning broadband wireless access (BWA) spectrum. These decisions would now be taken to the Cabinet for approval, media reports added.

According to reports, both the state-run players had requested the government to refund the amount they paid in 2010 for the BWA spectrum after they surrendered the airwaves as this had seriously depleted their cash reserves. MTNL had paid about Rs 4500 crore in 2010, while BSNL had paid over Rs 6500 crore.

MTNL reported net loss of Rs 1256.19 crore in Q1 June 2013, higher than net loss of Rs 1059.29 crore in Q1 June 2012. Net sales rose 6.3% to Rs 883.16 crore in Q1 June 2013 over Q1 June 2012.

MTNL provides basic phone, internet and cellular mobile telephony services in Delhi and Mumbai. The Government of India (GoI) holds 56.25% stake in MTNL (as per the shareholding pattern as on 30 June 2013).

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