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Sale whispers set MTNL alight

Mumbai, Dec. 11: The Mahanagar Telephone Nigam (MTNL) share, which took a hard knock on bourses in recent weeks following hints of its possible merger with Bharat Sanchar Nigam (BSNL), rallied today on reports that the Disinvestment Commission has begun preliminary work on submitting proposals for offloading government equity in as many as 12 PSUs, including the two government-owned telecom companies.

Opening at Rs 109.40, shares of MTNL rose to the day’s high of Rs 111.90, reflecting the hectic buying for the scrip. However, selling soon came in at these levels, and the share eventually ended at Rs 107.75, a rise of Rs 2.50 or 2.40 per cent over its previous finish. The counter saw 4,404 trades with over 5 lakh shares being transacted.

Many preferred to greet the news with caution, pointing out it was too early at this stage to comment on its outcome.

“In any case, it is a welcome move. The markets were not optimistic about MTNL being put on the disinvestment list,” a broker said. However, a telecom sector analyst averred that with divestment of HPCL itself proving to be a time-consuming affair, the MTNL selloff is unlikely to happen.

“With the entire divestment issue itself being the subject of a political debate both within the government and the Opposition, the divestment of MTNL will not be smooth sailing,” another analyst from a local brokerage said.

In September Mahajan had ruled out any move to privatise these PSUs prior to their merger.

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