Gitanjali Gems falls below face value at Rs 9.65; tanks 85% in six weeks

The stock hit a new low of Rs 9.65, down for the 26th straight sessions.

Gitanjali Gems is locked in lower circuit of 5% at Rs 9.65, and has slipped below its face value of Rs 10 on the BSE. The stock is trading at fresh record low, down for the 26th straight sessions. It has lost as much as 85% from Rs 62.85, since February 14, the day the Punjab National Bank (PNB) fraud came to light.

PNB said last month it had been defrauded of about $2 billion. The bank accused diamantaire Nirav Modi and his uncle and business partner, Mehul Choksi, promoter of listed Gitanjali Gems, and maker of waxes, oils and lubricants Chandri Allied Paper & Allied Products of colluding with rogue bank employees to secure credit from overseas lenders using fraudulent guarantees.

The Securities and Exchange Board of India (Sebi) and exchanges have introduced additional surveillance measures (ASM) on total 20 stocks including Gitanjali Gems with surveillance concerns such as price variation, volatility etc. with effect from Monday, March 26, 2018.

The securities shall be placed in price band of 5% and margins shall be levied at the rate of 100%. The shortlisted securities shall be further monitored on a pre-determined objective criteria and would be moved into Trade for Trade segment once the criteria gets satisfied.

“Market participants may note that ASM framework shall be in conjunction with all other prevailing surveillance measures being imposed by the Exchanges from time to time and as may be applicable,” BSE said in a notice dated March 21, 2018.

Further, it may also be noted that the shortlisting of securities under ASM is purely on account of market surveillance and it should not be construed as an adverse action against the concerned company, it added.