MTNL staff severance plan triggers institutional interest

DALAL STREET SPIKES

State run MTNL was in limelight gaining 7.75 per cent on the back of aggressive fund-based buying.

According to market sources, FIIs are believed to have bought into the telecom stock in anticipation that the VRS introduced by the company will improve its financials.

The stock finally closed at Rs 137.90 with volumes accounting for more than 30 lakh shares at the BSE alone.

According to sources, a leading foreign brokerage house in its report has re-rated the stock on the back of anticipation that the introduction of a voluntary retirement scheme (VRS) for its group C and D employees, will help the company to bring down its cost substantially as well as reduce its bloated employee base.

This resulted in renewed buying at this counter in the last afternoon trade, sources added. The interest in the stock is also on yesterday's rise in MTNL ADS. The MTNL ADS rose by 7.69 per cent or 55 cents on the NYSE to $7.70.