PNB fraud: Jewellery stocks lose shine, Gitanjali Gems shares tank 60%


Mumbai: While Mehul Choksi-promoted Gitanjali Gems Ltd has lost around Rs435.91 crore or nearly 60% of its market value ever since the fraud at Punjab National Bank (PNB) came to light, the steep erosion has hammered other jewellery stocks as well.

Of the 46 listed jewellery stocks on the BSE, only 11 have logged gains since the close of 13 February, while 26 have shed value since the PNB fraud was made public.

Topping the list of losers was Gitanjali Gems, which has plummeted 58.5% to a record low of Rs26.10 per share.

Following next were Sagar Diamonds Ltd, Asian Star Co. Ltd, Radhika Jeweltech Ltd, PC Jeweller Ltd, Lypsa Gems Jewellery Ltd and Tribhovandas Bhimji Zaveri Ltd, which have shed between 12.5% and 30.5% in the same period. In the same period, BSE’s 30-share Sensex shed 1.4%.

“Jewllery makers are likely to be out of favour for a while, as they could be under the scanner of private as well as public banks, after the recent developments at PNB,” market analyst Ambareesh Baliga said.

“The reason could be low cost funds may not happen for a while,” he added.

“Titan could be an exception, and could gain. It is looked as a Tata company more than a jewellery company,” said Baliga.

Titan Co. Ltd shares have added 1.1% since the PNB scam unfolded.

On 14 February, state-run PNB said it has unearthed fraudulent transactions of around Rs11,400 crore in one of its branches in Mumbai and filed a complaint with the Central Bureau of Investigation (CBI) on the fraud amid concern that the contagion could spread to other banks. The case involves fraudulent transaction by Nirav Modi and Mehul Choksi, who are being investigated by multiple probe agencies. It is alleged that Modi and others conspired with several PNB employees to fraudulently obtain advances for paying overseas suppliers.livemint