Welspun India turns volatile; stock dips 8%

The stock dropped 8% after rising over 5% in intra-day trade

Don't want to miss the best from Business Standard?

Welspun India turned volatile after the stock slipped over 8% in late noon trades after rising over 5% in early trades on the back of heavy volumes.

The stock of Asia's largest home textile maker almost halved from Rs 103 on August 19, after US-based Target Corporation announced last week it was terminating business with the Indian manufacturer for substituting the cotton in bedsheets with a different type than the contracted Egyptian one.

Welspun India in a clarification on Thursday said that the business with Target Corporation was approximately US$ 90 million in FY16, which accounted for almost 10% of the company’s overall business.

The product is question with Target specifically, represents about US$ 8.5 million in FY16, which accounted for about 1% of the company’s overall sales and about 10% of its business with Target.

The company is getting its full supply chain reviewed by an external agency. It expects the audit to be completed in six to eight weeks and we believe we will emerge stronger from this process with tighter controls and robust processes.

At 10:34 am, the stock was up 3.5% at Rs 61.40 on the BSE, as compared to 0.28% rise in the S&P BSE Sensex.

The trading volumes on the counter surged more than 10-folds with more than 5% of total equity of Welspun India changed hands via multiple block deals. A combined 59.11 million shares representing 5.9% of total equity of the company changed hands on the NSE and BSE so far.