Gitanjali Gems' mcap erodes by more than half in five sessions

Gitanjali Gems was locked at 10% lower circuit at Rs 30.45 at 13:50 IST on BSE, with the stock extending previous four session's slide after the company's promoter Mehul Choksi's name figured in the recently unearthed massive banking fraud in PNB.

Meanwhile, the S&P BSE Sensex was up 95.36 points or 0.28% at 33,870.02. The S&P BSE Small-Cap index rose 0.18%, underperforming the Sensex.

On the BSE, 7,282 shares were traded on the counter so far as against average daily volumes of 8.96 lakh shares in the past one quarter. The stock had opened with a downward gap and remained locked at 10% level at Rs 30.45 so far during the day, which is also its 52-week low. The stock had hit a 52-week high of Rs 104.80 on 28 November 2017.

The stock had underperformed the market over the past one month till 19 February 2018, sliding 50.62% compared with the Sensex's 4.89% fall. The stock had also underperformed the market over the past one quarter, declining 51.16% as against the Sensex's 1.3% rise. The scrip had also underperformed the market over the past one year, tumbling 50.18% as against the Sensex's 18.64% rise.

The small-cap company has equity capital of Rs 118.62 crore. Face value per share is Rs 10.

Shares of Gitanjali Gems have slumped 51.55% in five trading sessions to its ruling market price of Rs 30.45, from its closing of Rs 62.85 on 12 February 2018, after Punjab National Bank (PNB) disclosed to the stock exchanges on 14 February 2018 about the detection of a massive banking fraud amounting to $1771.69 million (about Rs 11500 crore) in one of its branches in Mumbai.

The massive banking scam allegedly involves jeweller Nirav Modi as the prime accused in connivance with some PNB officials. The name of Mehul Choksi, promoter of Gitanjali Gems, also figured in this scam. Mehul Choksi is uncle of Nirav Modi. The Government of India has already directed investigative agencies for a probe into this scam.

Mehul C. Choksi controlled 22.81% stake in Gitanjali Gems end December 2017.

On a consolidated basis, Gitanjali Gems' net profit rose 40.2% to Rs 63.80 crore on 4.4% decline in net sales to Rs 3788.70 crore in Q2 September 2017 over Q2 September 2016.

Gitanjali Gems is engaged in diamond cutting and polishing, and diamond and gold jewelry manufacturing.

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