After Losing 50% In 4-Days, Welspun India Shares Have Finally Gained

Business

oi-Sunil Fernandes

By Sunil Fernandes

Published: Friday, August 26, 2016, 10:12 [IST]

Shares in Welspun India, have finally gained, after losing 50 per cent in 4 trading days. The shares, which closed last Friday at Rs 108, are now available at Rs 57, exactly a week later.

The stock was finally seeing some sort of short covering rally, after relentless fall and was trading 5% higher at Rs 57.

The fall began at the beginning of the week, when Target Corporation said that it was cutting ties with the company, after it had supplied it with bedsheets that were not made from Egyptian cotton. The allegation was that it had used cheaper variants. Target is the second largest customer for Welspun India.

The problem did not end there, after that there were reports that Walmart would look at the products and do an audit. Now, J C Penney has said that it will review its supply chain and do a check.

All in all, it has been a horrific time for the company. It did come out and say that it was appointing one of the top 3 auditors. But, that has not stopped investors from worrying.

Welspun India generates a substantial revenue from the US, which is probably more than 60 per cent of its revenues. If the other biggies severe ties with the company, it is going to be a difficult phase for the company.

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