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PNB fraud: Over Rs 9,000 crore of investor wealth wiped out in last four days

New Delhi: Shares of Punjab National Bank declined for a third straight session and were down as much as 5.7 percent at their lowest in over a year on concerns over the potential liability from the scam.
Shares of PNB were down 4.64 percent to Rs 122.40 on BSE at 1.01 pm while on NSE the scrip was trading at Rs 122.25, down 4.68 percent.
The slide in PNB stocks has wiped out total investor wealth of Rs 9,047 crore in the last four days. The Mcap of the public lender shrunk to Rs 29,798.34 crore on February 16 at 1.20 pm, from Rs 39,209.62 crore on February 12.
Talking to Zee Media Digital, Jagdish Thakkar, market expert and former President of Vadodara Stock Exchange said that the scrip should be avoided for a little while.
“PNB should be avoided for the time being till the exact quantum of loss is ascertained. Day traders my short with SL of Rs 127,” he added.
Meanwhile, shares of Union Bank of India too declined more than 3 percent in morning trade after the lender said it has an exposure of Rs 1,900 crore to the PNB fraud case. The stock fell 3 percent to touch an intra-day low of Rs 116.50, which was also its 52-week low level, on BSE. The stock slumped to its 52-week low level of Rs 116.50 on NSE as well, down 3.07 percent over its previous close.
State-owned Punjab National Bank on February 14 said it has detected a Rs 11,400 crore scam where billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking from a branch in Mumbai to secure overseas credit from other Indian lenders.
While PNB did not name the other lenders, besides Union Bank of India, Allahabad Bank and Axis Bank are said to have offered credit based on letters of undertaking (LOUs) issued by PNB.
Shares of Allahabad Bank also fell to the 52-week low level of Rs 53.10, and Axis Bank fell 1.23 percent to an intra-day low of Rs 537.05 on BSE today.
A fortnight after the scam was first reported, PNB Chairman and Managing Director Sunil Mehta yesterday said it has the capability to recover the dues from Nirav Modi and promised to take action against all wrongdoers.