As the shares of PNB continue to slide for the fifth straight day, the five-day loss in the market capitalisation of Punjab National Bank has exceeded Nirav Modi’s Rs 11,400 crore fraud. PNB shares are on a free-fall for the last five days since after India’s second largest PSU bank has said that it has detected some “unauthorised and fraudulent” transactions at the Brady road branch in Mumbai. Amid the so-called scam, the alleged diamond merchant Nirav Modi was named in obtaining buyer’s credit from several Indian lenders by raising fake LOUs (Letter of Undertakings) from Punjab National Bank by unauthorised means.
Shares of Punjab National Bank has fallen about 30% in the last five days as the implications of the biggest banking scandal are coming out day after day. Following such a sharp decline in the share prices of India’s second-largest bank — Punjab National Bank — about Rs 12,250 crore has been wiped off from the market capitalisation of the bank. Today also, shares of Punjab National Bank emerged as the top loser among all of the components of Nifty PSU Bank index. The stock of PNB nosedived as much as 4.72% to an all-new 52-week low of Rs 111 on Tuesday on NSE.
As per 52-week low share price, the market capitalisation of PNB was at Rs 26,924 crore. As on 12 February 2018, Punjab National Bank held a market capitalisation of Rs 39,175 crore on BSE. Since after the bank has informed about the unauthorised transaction, a heavy trading volume was observed in the shares of PNB. As at 12.25, more than 6.7 crore shares exchanged hands on both NSE and BSE with about 6.2 on NSE alone.
In a major development yesterday, Nirav Modi’s written letter to Punjab National Bank came into the picture. According to the PTI reports, Nirav Modi said that his companies don’t owe an amount of Rs 11,400 crore, which has been publicised by PNB. The massive liability cited by PNB has downtrodden the reputation and has affected the going-concerns of businesses, namely Firestar International and Firestar Diamond International. In the apparent fraud, Nirav Modi clarified that My wife and uncle are wrongly named. “My uncle is also wrongly named in this complaint since he has an independent and unconnected business and none of them are aware or concerned with my dealings with your bank,” PTI reported quoting Nirav Modi as saying.