Do you know why PNB is Falling continuously?
For live share price of PNB please click here
The current price of PNB as on 11 Dec 2018 is 66/- Rs per share with a market capitalization of approx 20,000 crores (twenty thousand crores).
We know it is falling from the high level of 220/- per share in Jan 2018 to 60/- Rs per share in Sep 2018.
This huge fall is because of two reason the first reason is off-course the Nirav Modi scam and the second reason is its valuation in Jan is so high that it was trading at lifetime high so a scam news hits very badly PNB and I think it will surely bounce back but it takes a longer time than usual.
Why it is still falling continuously even after a long time of Nirav Modi scam?
Any company performance determined from its Balance sheet and Profit & Loss account and in case of a bank, its performance is calculated from its Loan Book.
It means that the loans which are given by bank are the asset of the bank and the interest earned on this loans are the income of the bank.
But what happened if people will not pay the interest or the principal amount for a long time? in this case, the borrower account gets blacklisted by mentioning in its credit score report.
So that he or she will not become eligible for taking a further loan from any bank until its loan account get partially or fully paid and consider his or her account as NPA (Nonperforming Asset).
Now we understood that what NPA is and in case of PNB its NPA is increasing continuously from a long time due to this people start losing interest in stock over time and then Nirav Modi Scam happened.
Even after a long time, PNB has to suffer the losses done by Nirav Modi and at the same time with his increasing NPA so this is the main reason for falling of PNB share price continuously.
PNB current health
The managing director of PNB says “We have treated this as an opportunity, to introspect, identify and recognize our problems and taken a series of steps to strengthen the bank” and he is right the operating profit of bank is improved to 4195 crores in comparison to 3217 crores in the same quoter previous year.
PNB is improving every day but it will take time to see the result on ground level but currently, its situation is not so well because it has a large number of NPA account and then this Scam came out
So my suggestion is you can invest in this stock only at the SIP mode means you can invest only at dips and invest only a small percentage of total capital please see my “Is it good to invest in PNB?” section for more detail.
Is it good to invest in PNB @ current share price?
The answer to this question is different for different person.
whether it is good to invest in PNB at current levels is dependent on how much risk you are willing to take or how much risk you can take.
There is no doubt that there is high risk (Not very high) in investing in PNB at the current time but the price is so good that even little greedy people can dare to take the risk of investing his hard earned money in PNB.
Now the answer is if you have some spare money to invest for the next ten years (please focus on the word for the next 10 years ).
Then it is sure to buy at current levels because it may possible that you will never see this price again in future.
I know 10 years is a long time but you will get the result accordingly I mean you will get the exponential return.
Advice: Please please stay away from this stock if you can’t invest for 10 year period unless you are ready to take the high risk of losing capital.
I know currently PNB share price is on the attractive level but you must follow the advice given above.
I always say that buying a stock is not gambling but if you will take too much risk then it is like gambling this is why I always recommend to buy for the long term and suggest to invest in good quality stocks.
Also, I only suggest to invest in some good quality stock for long-term only but all risk is yours this website(equitypaisa.com) or me is not responsible for any losses you made .
Invest only if you can take the high risk and ready to invest for at least 10 years.