Punjab National Bank (PNB), hit by the Rs 11,400 crore fraud, on Thursday plunged by another 12 per cent on the stock exchanges, leading to a massive erosion of over Rs 8,000 crore of investors wealth in two days.
The PNB stock had plummeted by 10 per cent on Wednesday after the bank said it had detected a $1.77 billion fraud at its Mumbai branch. The stock closed 11.97 per cent lower at Rs 128.35 on the BSE on Thursday. Market capitalisation of the bank has now fallen to Rs 31,132 crore with investors losing over 20 per cent of their wealth.
The bank has posted a net profit of Rs 1,324 crore in FY 2016-17. While announcing the Q3 results recently, the bank had claimed that it showed a good improvement on asset quality front as gross non-performing assets were lower at 12.11 per cent compared to 13.31 percent in previous quarter. Net NPAs were also lower at 7.55 per cent from 8.44 per cent on sequential basis. In absolute terms, gross NPAs were down by 0.2 per cent sequentially at Rs 57,519.4 crore and net NPAs fell by 1.4 per cent to Rs 34,075.7 crore for quarter ended December 2017. It posted a profit growth of 11 per cent at Rs 230.11 crore and net interest income growth of 7 per cent at Rs 3,989 crore year-on-year for the third quarter. Shares of PNB Housing Finance declined for the day at Rs 1199.00, down 4.30 per cent on the BSE.
Jaikishan J Parmar, research analyst, Angel Broking, said, “The stock tanked considering the magnitude of the scam which is nearly one-third the market capitalisation of PNB. The case assumes significance because based on these transactions other banks had advanced loans to these clients abroad … PNB has also involved the Enforcement Directorate to track the audit trail of the money. This dampens the sentiments around PNB, which had seen a marginal improvement in its asset quality in this quarter.”
Shares of Gitanjali Gems plunged by 20 per cent after the company came under the scanner of various investigating agencies following PNB’s declaration of the Rs 11,400-crore fraud. Gitanjali Gems has tanked 42.20 per cent in the last one month. Some other jewellery stocks witnessed a similar fate with PC Jeweller ending the day at Rs 356.40, down 5.31 per cent, Tribhovandas Bhimji Zaveri (TBZ) at Rs 112.55 down 2.64 per cent, Thangamayil Jewellery at Rs 541.50, down 5 per cent and Rajesh Exports at Rs 802.50, down 2.10 per cent.
However, the 30-share Sensex rose by 141.52 points, or 0.41 per cent, to close at 34,297.47. The broader NSE Nifty gained 44.60- points, or 0.42 per cent, to end at 10,545.50 after touching a high of 10,618.10 with WPI inflation easing to six-month low of 2.84 per cent in January and some blue chips showing encouraging earning for the third quarter.