Street signs: PNB Housing closes gap with PNB, BSE shares fall, and more

The plunge in share prices of Punjab National Bank (PNB) following the Rs 127-billion fraud has narrowed the market capitalisation gap between the lender and its housing finance arm. Currently, PNB Housing, in which PNB owns 33 per cent stake, is valued at Rs 201 billion. On the other hand, PNB is valued at Rs 245 billion. Interestingly, the value of PNB’s holdings in its two listed arms – PNB Housing and PNB Gilts – is Rs 72 billion, which is 30 per cent of the state-owned lender’s market capitalisation.

Pavan Burugula

Close shave with jewellery firm loan

The valuation of a diamond is a tricky business. And a private sector bank realised it recently when a jeweller approached it for a loan and offered an equal value of diamonds as collateral. However, when the bank sent it for independent valuation, it turned out that the diamonds were worth just 10 per cent of the quoted value. But the jeweller argued that the value of diamond was correct, according to his books. The bank manager refused to sanction the loan unless more loan-worthy collateral was given. 

Joydeep Ghosh

BSE shares soft despite buyback

Share prices of BSE Ltd dropped 10 per cent in February even as the Bombay Stock Exchange commenced its Rs 1.66-billion share repurchase programme. The stock underperformed benchmark Sensex which fell nearly five per cent during the month and even slipped below its initial public offer price of Rs 806. As per the buyback data, BSE so far purchased 274,320 shares, or 36 per cent of its total buyback size of 754,545 shares. The maximum buyback price has been set at Rs 1,100 apiece. As buyback is done through the ‘open market’ route, BSE can purchase shares below the maximum price. As per Sebi regulations, BSE will have to buyback at least half of the shares proposed in the offer.
 

Samie Modak