The ongoing scam in Punjab National Bank triggered by diamond traders Nirav Modi and Mehul Choksi of Gitanjali Gems dragged almost all the other jewellery stocks. Panic gripped investors in jewellery stocks after the Enforcement Directorate raided the jewellery outlets, offices and residence of Modi in connection with ₹11,400-crore worth fraudulent deals.

Shares of Gitanjali Gems plunged up to 20 per cent to ₹47, PC Jeweller slumped 5 per cent to ₹356, Tribhovandas Bhimji Zaveri 2.38 per cent to ₹113, Thangamayil Jewellery 5 per cent to ₹541 and Rajesh Exports by 2 per cent to ₹803 on the BSE.

Saurabh S Jain, Managing Director, SSJ Finance & Securities, said though the development in one gold company will not impact the other, it is better for investors to stick with the leaders in the sector at the moment rather than venturing into value-hunting in view of the uncertainty.

If you really analyse the sector, the larger play of these companies is in retail rather than importing and exporting gold jewellery and the prospect for jewellery demand in India is looking good with the government measure to bring in more standardisation and transparency in gold trade, he added.

Punjab National Bank on Wednesday disclosed that it had detected fraudulent transactions with financial implication of $1.77 billion (about ₹11,346 crore) and the matter has been referred to law enforcement agencies for speedy recovery.

Under ED scanner

“Four big jewellers — Gitanjali, Ginni, Nakshatra and Nirav Modi — are under the scanner. The CBI and Enforcement Directorate are looking at their arrangements with various banks and end-use of money raised,” said a senior official.

On Thursday, a spokesperson for ED confirmed that raids had been conducted at two locations including the offices, and premises in Mumbai and Delhi of jewellers Nirav Modi and Mehul Choksi of Gitanjali Gems.