A day after the Central Bureau of Investigation (CBI) conducted nationwide raids and arrested officials in financial sector companies, on charges of corruption, shares of entities concerned continued their southward movement. Stocks of the real estate companies remained under pressure, while the public sector undertaking banks also lost value.
The corruption charges were made against officials of LIC Housing Finance (LICHF), Bank of India (BoI), Central Bank of India (CBoI), Punjab National Bank (PNB), Life Insurance Corporation of India (LIC) and Money Matters Financial Services (MMFS), on accepting bribes from private financiers to route loans to corporate.
On a day when the Bombay Stock Exchange Sensitive Index, or Sensex, moved 0.73 per cent south or 141.69 points, to close at 19,318.16, realty index got the hardest hit as it dipped 5.4 per cent, while the bankex fell 1.42 per cent.
Shares of PNB slipped 6.38 per cent to close at Rs 1,183.75. BoI shares dipped 5.85 per cent to Rs 420.30. Stocks of LICHF was down by one per cent to Rs 1,058.10, while those of MMFS plunged another 20 per cent for the second day in a row to Rs 425.
Among realty stocks, DB Realty lost the most at 9.99 per cent to close at Rs 235.25, followed by Housing Development & Infrastructure at 9.69 per (Rs 186.45) cent and Orbit Corporation at 8.3 per cent (Rs 80.65).
Shares of India Infoline were down 13.51 per cent to Rs 92.15. “India Infoline is under pressure, since it has acted as a lead arranger for Money Matter’s QIP of Rs 450 crore,” said ICICI Securities in a note today.
| ALL FALL DOWN Price movement of banking and realty stocks | ||
| Company | Closing price (Rs ) | Chg % |
| LICHF | 1,058.10 | -0.98 |
| BoI | 420.30 | -5.85 |
| PNB | 1,183.75 | -6.38 |
| MMFS | 425.00 | -19.99 |
| India Infoline | 92.15 | -13.51 |
| DB Realty | 235.25 | -9.99 |
| HDIL | 186.45 | -9.69 |
| Orbit Corp | 80.65 | -8.30 |
| Note: % change over previous day Source: BSE | ||
Edelweiss said in a statement, “We believe these investigations will have negative implications on companies involved and will remain an overhang, both from financial impact as well as sentiment perspective.”In case of LICHF, the note further added, “it jeopardizes the growth prospects on one hand and raises issue of management change on the other.”
