MTNL is riding high on the bourses! Know why

Mahanagar Telephone Nigam Ltd. rose nearly 20 percent on media reports that the government was planning to delist the communications company ahead of its own planned date for a merger with the larger Bharat Sanchar Nigam Ltd.

The Department of Telecommunications, which controls both MTNL and BSNL, had set July 31, 2015 as the cut-off date to bring in effect the much talked about coupling between the two loss making companies. MTNL runs telecom services in Delhi and Mumbai, while BSNL has a nationwide presence apart from these two cities. Both companies share networks.

MTNL crossed above the crucial 20-day moving average in trade today, rising 2.8 rupees to 19.35 rupees. More than 10 lakh shares changed hands on the NSE. The stock has gained 26 percent in the last two weeks but is down a whopping 47 percent over one year.

The government controls 56.3 percent equity of MTNL. Domestic institutions have a 21 percent stake. BSNL is not listed.

(Image credit: Indiatimes)