Punjab National Bank (PNB) has been hit by a Rs 11,000-crore scam (here is an article on what happened). The stock is down some 15% since the start of this week. Much of the price for this scam has been paid by PNB’s shareholders and that includes the funds that hold PNB.
117 mutual funds own PNB stock as we speak. However, for the vast majority, the size of PNB in their portfolios is too small to matter. On average, this is just 1.6% of their assets.
The thematic ETFs dedicated to public sector banks have been hit hard, registering a fall of about 5% in NAV overnight. Other thematic PSU banking funds have fallen by 1.5% to 2.5%. LIC MF Equity Fund, a diversified fund has also fallen by 1.25%. The exposure in these funds ranges from 4.5% in SBI PSU fund to almost 10% in the two ETFs.
Here is how the damage looks like:
|Fund||Net Assets in PNB (%)||NAV fall on 14/02/18 (%)||Fund Size (Rs Cr)|
|Reliance ETF PSU Bankbees||9.97||4.78||134|
|Kotak PSU Bank ETF||9.97||4.78||126|
|LIC MF Banking and Financial Services Fund||7.54||2.45||82|
|LIC MF Equity Fund||5.53||1.25||379|
|SBI PSU Fund||4.49||1.51||225|
Source: Value Research
Two of the five funds are ETFs or exchange-traded funds that are tied to PSU bank indices. The fund manager has little discretion to change the allocation here. Two of the rest are thematic funds dedicated to PSUs and only one is a diversified equity fund.