Mahanagar Telephone Nigam Limited (MTNL), a state-run telecom provider, is gearing up to raise a significant sum of Rs.5000 Cr through the divestment of its real estate assets. The properties targeted for divestment are primarily located in the bustling cities of Delhi and Mumbai.
In light of tough competition, MTNL's struggle becomes evident against the backdrop of rapid mobile expansion. The telecom provider recently unveiled its strategic intent to monetize its real estate holdings and has sought the expertise of a global real estate consultancy.
Amidst its ongoing challenges, the debt-laden telecom company has instructed real estate consultants to explore various avenues, which may involve a combination of leasing and outright sales. Additionally, MTNL is considering redeveloping land parcels through public-private partnerships as part of its comprehensive monetization strategy. In short, MTNL’s plans not only revolve around selling but also include leasing and potential redevelopment of its land.
In a competitive bidding process that saw MTNL overtaking notable global real estate consultants like Jones Lang LaSalle, Cushman & Wakefield, and CBRE, it has awarded the consultancy to DTZ — a firm that has been operating in India for nearly a decade.
According to insiders, efforts to monetize MTNL's lesser-valued properties are expected to come to fruition before the end of the current calendar year. However, one official connected to the matter indicated that a clearer picture would emerge in about a week’s time.
To bolster its financial standing, MTNL possesses nearly 100 parcels of land across the National Capital Region and Mumbai, including a high-value property located in West Delhi. This 20-acre prime parcel is estimated to be worth around Rs.2,000 Cr. Notably, a senior representative from DTZ opted not to provide any comments regarding the details of this transaction.
Last year, MTNL had also called for bids as the traditional landline provider found itself grappling with substantial industry losses. As a consequence of a downturn, this state-run telecom company's debt surged to Rs.1,093 Cr, following a 26% revenue decline in the third quarter of 2012.
In a parallel initiative, BSNL is also evaluating options to divest its real estate assets, reflecting the broader trend among state-run firms, including Air India, that are seeking bids amid a sluggish economic environment.