Nephew Modi's scam turns Choksi's Gitanjali toxic; investors flee as scrip races off to 52 week low

Last Updated: Thu, Feb 15, 2018 15:32 hrs
Modi Choksi Nirav

Punjab National Bank has officially commented that Nirav Modi is the man responsible for wiping off nearly 1/3rd market share of the bank. The bank has admitted that this is a scam, an inside-angle, and fired employees linked with the scandal.


  • Nirav Modi on the run. Reports say has fled abroad. Uncle Mehul Choksi's Gitanjali Gems' review of Q3 results postponed.
  • Circuit breakers have been triggered after the scrip posted a 19.97% intra-day loss
  • Gitanjali is valued at $1.9 billion (unverified reports). September 2017 revenues stood at Rs 2327.37 crores (NSE filing).
  • 13 lakh sell orders and nearly 1 lakh buy orders placed on the Bombay Stock Exchange at 2:30 PM
  • Scrip races to 52 week low of Rs 47. Fortnight ago, it was trading at Rs 88.
  • ED and sleuths chasing Modi. Gitanjali management could be further grilled for info in the $1.77 billion or Rs 11,400 crore embezzlement

The past two days, have not only been tough times for PNB and the banking sector, but also for investors holding exposure in scrips such as Gitanjali Gems. Besides Punjab National Bank and investors, the scam is turning out to be a headache for Mehul Choksi, the Managing Director of Gitanjali Gems.

Choksi's Gitanjali Gems has been identified as the company that colluded with Nirav Modi in embezzling nearly Rs 11,400 crore from Punjab National Bank. Together the duo have been accused of siphoning off funds, in India's biggest racket. The racket is bigger than Harshad Mehta and Ketan Parekh put together.

According to media-reports, Nirav Modi is absconding. He was last seen visiting China. This has turned out to be headache for Choksi who's Gitanjali Gems is struggling on the loser-board of the BSE exchange.

Gitanjali Gems has so far traded nearly 20% or Rs 11.70 down on the BSE small-cap. The scrip is trading at Rs 46.90 a share, and recorded its 52 week low. While the Enforcement Directorate is raiding offices of Nirav Modi and Gitanjali Gems, Choksi might have to offer more explanation to stock exchanges.

Gitanjali's board was supposed to review unaudited financial results on Valentine's Day. Company officials said in a report that trading window for Directors, officers, and designated employees of the company will remain shut down from February 7 - 16. But later came out with another communication that "pressing contingencies" led to postponing the meet on Feb 14th.

Neither Choksi nor the management has so far answered when the results for the quarter ending December 31 2017 would be announced. Choksi's Gitanjali has also been questioned by exchange houses to confirm whether raids were indeed conducted. Add to it, confused investors have started posing questions whether to hold or sell their positions in the stock. Obviously many purchased it at a high.

Here is a tweet:

There are rumours that management of Gitanjali Gems may have purchased 13.34 million shares in an off-market bulk deal. Trade analysts highlighted that the stock has moved between levels of Rs 30 as a support and Rs 96 as a resistance. Current mood however indicates that there is a major selling spree, with the negative news and hence the fear that support prices may further drop in the coming trading sessions.

More sell orders could further bring the stock price down. Currently, there are 13.44 lakh sell orders for 1.09 lakh buy orders.

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