The combined market value of all listed state-owned banks has plunged below that of just one private lender \u2013 HDFC Bank \u2013 after a massive sell-off in shares of public sector banks in the wake of the biggest banking fraud in India. The combined market capitalisation of the 21 listed public sector banks on Thursday stood at Rs 4.34 lakh crore, Rs 46,726 crore less than the valuation of HDFC Bank at Rs 4.81 lakh crore. Interestingly, these 21 banks account for about 70% of the total advances of all listed banks, according to Capitaline data. HDFC Bank's share of advances of this set is about 7.5%. The shares of state-owned banks, which are saddled with bad assets and slipping profitability, had caught the attention of investors following the government's capital infusion plan of Rs 2.1 lakh crore announced last October. However, the fraud at the Punjab National Bank coupled with the surprise loss of State Bank of India in Q3 FY18 have resulted in the combined market capitalisation of these banks receding to the same level, as before the government's recap announcement. The Nifty PSU Bank index has come-off 23% from its mid-November peak. This translates to a combined market cap loss of Rs 1.14 lakh crore, with SBI alone losing Rs 55,936 crore in market value. PNB has lost Rs 12,771 crore in market cap and Bank of Baroda Rs 9,297 crore. Shares of PNB, Bank of India, Allahabad Bank and Bank of Maharashtra have lost more than 37% of their value from their November highs, with PNB losing the most at 45%. Analysts believe the fraud will lead to higher provisioning and may further impact the profitability of banks, which are already grappling with growing bad loan assets. For the quarter ended December 2017, 16 public sector banks together posted a net loss of Rs 18,948 crore, with State Bank of India reporting a loss of Rs 2,416 crore. Bank of India reported a net loss of Rs 2,341 crore during the quarter. On Wednesday, Jefferies reduced the price target on PNB, but maintained its \u2018hold\u2019 rating. The brokerage observed that the alleged fraud in the bank necessitates capital infusion of Rs 5,500 crore to just about meet CET 1\/AT 1\/CRAR norms, calling it \u201ccapital at risk\u201d after operational failure. Along with the new regulation on stressed assets and disarray in trade-finance, the next two quarters look dismal with low growth and higher provisions, the brokerage said. It now estimates a loss of Rs 7,600 crores ($1.17 bn) in FY18 and loss of R8,760 crore in Q4 of FY18 for PNB. The bank had reported a net profit of Rs 230 crore in third quarter of FY18.