InvestorQ : How do you see PNB as a stock worth investing at this price?
rhea Babu made post

How do you see PNB as a stock worth investing at this price?

11 months ago

While the price of PNB may look optically cheap, it has a larger problem of wilful defaulters. Many of the cases are already well documented. But, recently, RBI has put out a list of wilful defaulters of PNB on its website and that is quite disconcerting.

PNB has a real problem of sticky defaulters. A total of 1787 wilful defaulters owe the bank close to Rs.37,000 crore. Major defaulters include Gitanjali Gems, Winsome Diamonds and ABG Shipyards. This list pertains to wilful defaulters above Rs.25 lakhs.

It needs no reiteration Mehul Choksi, Nirav Modi and others lead this pack of defaulters. All these companies were provided loans by PNB as part of consortium lending practices. This creates serious questions about the lending practices of PNB.

Gross NPAs, after aggressive provisioning, still stand at 14.21%. That is an unsustainable level of NPAs and any investment in this stock can at best be speculative. Traders should avoid any investing view till asset quality improves substantially.