Nifty PSU Bank index has shed 18% value since February 14, when multi-billion rupees PNB-Nirav Modi LoU scam came to light. Punjab National Bank shares are down more than 40% since then. In today’s trade, two-thirds of PSU bank shares fell to their respective 52-week lows.
PNB fraud: PSU bank stocks have been broadly crumbling since the day, 14 February 2018, when the multi-billion rupees PNB-Nirav Modi LoU scam came to light. Shares of the fraud-hit Punjab National Bank have lost over 40% since then while the benchmark Nifty PSU Bank index has tumbled about 18%. PSB (public sector bank) shares witnessed a major jolt in today’s session as 14 out of 21 listed PSU bank stocks hit their respective 52-week lows with scrips of heavyweight state-run bankers such as Bank of Baroda, Bank of India and Canara Bank. Out of the Nifty PSU Bank components, other than PNB, shares of Union Bank of India, Allahabad Bank and Oriental Bank of Commerce have faced a massive rot since 14 February.
The stock of NPA-laden, scam-hit Punjab National Bank have faced several knee-jerk reactions in several trading sessions after the nation’s second-largest PSU bank PNB informed $1.77 billion (Rs 11,394 crore) worth of “fraudulent and unauthorised” transactions which happened to be the biggest banking scam in India with about $204 million (Rs 1,323 crore) added to the kitty in the last week of February. From that time, PNB has lost about Rs 16,000 crore in the market capitalisation with shares falling more than 40%. Shares of Punjab National Bank extended losses on Wednesday shedding nearly 4% as Sunil Mehta, MD & CEO, PNB appeared before the anti-fraud agency SFIO (Serious Fraud Investigation Office). Sunil Mehta was also summoned by SFIO, along with Chanda Kochhar and Shikha Sharma. The stock of PNB crashed 3.88% to a day’s low of Rs 94.05 on NSE.
In today’s trade, shares of 14 out of the total 21 listed PSU banks hit their respective 52-week low. Amid the constituents of Nifty PSU Bank index, shares of Andhra Bank were the biggest loser by falling over 8% to a 52-week low of Rs 39.1 followed by stocks of Canara Bank (down 7.26%), Allahabad Bank (down 5.53%), IDBI Bank (down 4.06%), State Bank of India (down 3.64%), Bank of India (down 3.38%), Indian Bank (down 3.1%), Oriental Bank of Commerce (down 2.94%), Bank of Baroda (down 2.88%), PNB (down 2.45%), Syndicate Bank (down 1.69%), and Union Bank of India (down 1.24%). In the meantime, the Nifty PSU Bank index fell 3.44% at 2,835.35.
Amid the massive rot in PSU bank shares, we take a look at 52-week low prices of 21 listed PSBs.
|Stock||52-week low||52-week low date|
|Bank of Baroda||128.55||7 March 2018|
|Bank of India||98.00||7 March 2018|
|Indian Overseas Bank||18.20||7 March 2018|
|Allahabad Bank||45.75||7 March 2018|
|Andhra Bank||39.00||7 March 2018|
|Canara Bank||242.25||7 March 2018|
|Oriental Bank of Commerce||91.10||7 March 2018|
|Union Bank of India||93.50||7 March 2018|
|United Bank of India||12.50||7 March 2018|
|UCO Bank||24.30||7 March 2018|
|Bank of Maharashtra||14.30||7 March 2018|
|Central Bank of India||62.65||7 March 2018|
|Dena Bank||18.85||7 March 2018|
|Punjab & Sind Bank||34.80||7 March 2018|
|Vijaya Bank||53.00||6 March 2018|
|Punjab National Bank||92.00||28 February 2018|
|Corporation Bank||29.55||28 February 2018|
|Syndicate Bank||54.20||19 February 2018|
|State Bank of India||241.15||19 October 2017|
|IDBI Bank||50.20||14 August 2017|
|Indian Bank||251.45||19 April 2017|
The diamond merchant Nirav Modi and Mehul Choksi (promoter of Gitanjali Gems) were alleged in the case of obtaining buyer’s credit from a number of domestic bankers situated outside India on the basis of LoU (Letters of Undertaking) issued by Punjab National Bank to Nirav Modi group companies by unauthorised channels and without following proper protocols. Since that time, almost all the PSU bank and companies related to Nirav Modi and Mehul Choksi have been on the radars of investigative agencies (ED, CBI & SFIO), the Reserve Bank of India and the government (Ministry of Finance). Following the probe into the multi-billion rupees scandal, many top officials have been named, called and summoned for questioning in connection with the Rs 12,700 crore.
Yesterday only, SFIO (Serious Fraud Investigation Office), an investigative arm of Ministry of Corporate Affairs, India had summoned top MD and CEOs including Sunil Mehta, Punjab National Bank; Chanda Kochhar, ICICI Bank; Shikha Sharma, Axis Bank. Following the news of summon being issued to top bankers of ICICI Bank and Axis Bank, a sharp drop was observed in the shares of ICICI Bank while the stock of Axis Bank didn’t react much to the news but fell in the late trades on Tuesday. Since today morning, shares of both ICICI Bank and Axis Bank were under pressure with ICICI Bank plunging more than 3% and Axis Bank plummeting nearly 2% at day’s low prices.