Anupam Shrivastava, BSNL chairman-cum-managing director, said MTNL will be delisted before the merger. MTNL stocks rallied 20% intra-day. The stocks were trading 14.46% up at 2.11 p.m in the Bombay Stock Exchange.
MTNL, however, said there is no delisting proposal under consideration of the board.
Communications and IT Minister Ravi Shankar Prasad had earlier said BSNL and MTNL's debt stood at Rs.4,459 crore and Rs.14,120 crore, respectively.
The department of telecommunication in September 2014 had set a deadline of July 31, 2015 for closing the merger of MTNL and BSNL. MTNL operates in Delhi and Mumbai while BSNL offers telecom services in the rest of the country. BSNL with 61,622 mobile towers has the second largest tower portfolio among all the telecom service operators.