PNB fraud effect: Gitanjali Gems shares tumble 20%, lock in lower circuit for 2nd consecutive day

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Published: February 16, 2018 10:29 AM

Shares of Gitanjali Gems tumbled 20% and got locked in the lower circuit for the second consecutive day as the jewellery maker is under watch by the Enforcement Directorate and CBI on the alleged involvement in PNB's Rs 11,400 crore fraud.

Shares of Gitanjali Gems fell as much as 19.98% to a 52-week low of Rs 37.45 on NSE. (Image: Reuters)

Shares of Gitanjali Gems tumbled 20% and got locked in the lower circuit for the second consecutive day as the jewellery maker is under watch by the Enforcement Directorate and CBI on the alleged involvement in PNB’s Rs 11,400 crore fraud. “Four big jewellers — Gitanjali, Ginni, Nakshatra and Nirav Modi — are under scanner. The CBI and Enforcement Directorate is looking at their arrangements with various banks and end use of money,” PTI reported citing an unidentified bank official. Shares of Gitanjali Gems fell as much as 19.98% to a 52-week low of Rs 37.45 on NSE.

One of the biggest banking fraud in India involving the second largest PSU bank Punjab National Bank’s has gripped several jewellers and Gitanjali Gems is one of them. Shares of Gitanjali Gems also nosedived 20% on Thursday as CBI and ED took charge of PNB’s Rs 11,400 crore scam. On the other hand, shares of Punjab National Bank extended the losses Friday sliding about 3.8% to hit a fresh 52-week low of Rs 123.5 on BSE. Shares of Gitanjali Gems got locked in the lower circuit within opening up of the market. In a quick succession, more than 61 lakh shares exchanged hands on both NSE and BSE with around 53 lakh on NSE alone.

The stock of Gitanjali Gems had fallen about 36% over the course of two days. Following a sharp plunge in the share prices of Gitanjali Gems, about Rs 250 crore (at day’s low price of Rs 37.55 on BSE) had been washed away from the market capitalisation of the company. Gitanjali Gems held a market cap of Rs 445.4 crore on BSE. Earlier on Wednesday, the state-run lender Punjab National Bank detected a $1.77 billion (about Rs 11,400 crore) scam in a Mumbai branch where billionaire jeweller Nirav Modi was alleged in acquiring fraudulent letters of undertaking (LoUs) to secure overseas credit from other Indian lenders. According to a PTI report, a senior official of a Punjab National Bank said there is strict instruction from the finance ministry to all banks that no big fish should go scot-free and no honest borrower is harassed.

Meanwhile today, Indian stock markets opened higher with Sensex rising over 200 points and Nifty breaching the 10,600-mark following the positive global cues after major US indices extended gains in yesterday’s trades. The S&P BSE Sensex rose as much as 210.77 points to hit the day’s high of 34,508.24 while NSE Nifty inched up 67.4 points to mark the day’s peak at 10,612.9.

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