Mahanagar Telephone Nigam (MTNL) share price surged 18% in early trade, touching a three-week high of Rs 51.20. This rally in the stock price of the company came after the positive development surrounding the company’s finances and government support.
But what exactly triggered the rally? Let’s take a look at the key reasons behind the sudden surge in the share price of MTNL.
Big money from asset monetisation
Cash strapped MTNL has managed to raise Rs 2,134.61 crore through the monetisation of its lands and buildings. This key development was announced in the Lok Sabha by Minister of State for Communications Pemmasani Chandra Sekhar. Apart from this, MTNL made Rs 258.25 crore from monetising assets like towers and fiber networks.
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The government has consistently backed MTNL and BSNL through financial aid and revival packages. In 2022, a Rs 1.64 lakh crore package was announced to improve their financial health, including spectrum allocation for 4G and 5G services.
Adding to this development, recently, the government approved an additional Rs 6,982 crore capex plan for BSNL. Although there was no clear statement on privatisation, the backing in a way still reassures investors that the company is not being abandoned.
High trading activity
The surge in MTNL’s share price also comes in line with a spike in trading volume. More than 27 lakh shares changed hands, far exceeding the two week average of 4.47 lakh shares.
In technical terms, the stock is trading above short-term moving averages, indicating bullish momentum.
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Looking at the stock performance, MTNL’s share price has delivered a return of nearly 14% in the last five trading days. However, over the past month, the stock saw a marginal decline of around 2%.
On a broader scale, MTNL’s share price has declined by approximately 18% over the last six months, while delivering a 49% return in the past year. On a year-to-date (YTD) basis, the stock has recorded a 4% decline.
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