In another blow to the country’s second-largest PSU lender Punjab National Bank after the billionaire diamantaire, Nirav Modi who allegedly defrauded the bank to the tune of nearly Rs 13,600 crore, mutual funds, FPIs and LIC have reduced their respective stakes in PNB. Shares of Punjab National Bank have fallen nearly 40% since 14 February 2018 when the bank informed that they have found “fraudulent and unauthorised” transactions in the Brady House branch, Mumbai amounting a fraud of Rs 11,400 crore. PNB-Nirav Modi fraud is so far touted as the biggest banking scandal in India. The quantum of fraud later got escalated to Rs 13,600 due to the ongoing probe by investigative agencies such as the Central Bureau of Investigation, Enforcement Directorate and Serious Fraud Investigation Office.
Government pitches in
Over the course of three months of March quarter of the fiscal year 2018, investors have ditched PNB shares which includes mutual funds, FPIs (foreign portfolio investors) and LIC. According to the March 2018 shareholding data of Punjab National Bank, the promoter and promoter group (President of India) had risen the stake to 62.25% while public shareholders have brought down their stake to 37.75% in the shares of PNB. Earlier at the end of December 2017, promoter and promoter group and public shareholders held 57.04% and 42.96% stake, respectively in Punjab National Bank, according to the shareholding data available with Bombay Stock Exchange.
Further, in the public shareholders’ category, FPIs have sold a huge chunk in Punjab National Bank. As per the latest shareholding data, FPIs stake has reduced to 9.14% at the end of March 2018 as against 12.56% as at the end of December 2017. On the similar lines, insurance companies have slashed their stake to 13.85% as compared to 16.04% at the end of 31 December 2017, out of which, LIC (Life Insurance Corporation of India) has cut its respective by more than 1% from the preceding quarter.
LIC’s stake in PNB was about 12.24% at the end of 31 March as compared to 13.93% as at the end of 31 December 2017, whereas, mutual funds have not altered their shareholding in PNB. According to the March 2018 data, mutual funds held 8.18% in Punjab National Bank as against 8.76% at the end of December 2017.
Shares of Punjab National Bank have plunged about 39% to Rs 97.95 from a share price level of Rs 161.65 (closing price as on 12 February 2018). Following a sharp decline in the share price of PNB, India’s second-largest PSU bank PNB had lost its position from the top 100 companies by market capitalisation on BSE. As per yesterday’s closing price of Rs 98.1, Punjab National Bank held a market capitalisation of Rs 27,095 crore (approximately) as compared to a market cap of Rs 39,210 crore as on 12 February 2018.