Shares of Welspun India reversed early gains and slipped into the red, falling nearly 9 per cent at the close of trade today, as investors continued to dump the stock following investigations of textiles sourced from the company by global retail majors.
Despite a positive opening and surging 6.25 per cent to Rs 57.80 in intra-day trade, shares of the company later pared the gains and ended 8.64 per cent lower at Rs 49.70 on BSE.
At NSE, shares of the company plunged 8.6 per cent to close at Rs 49.40.
In five days, the company's scrip has plummeted by nearly 52 per cent, wiping-out Rs 5,339.52 crore from its market valuation.
US-based retail chain Bed Bath & Beyond is conducting third party audit of items sourced from Welspun India, joining the likes of Walmart and JCPenny following lapses in supplies by the Gujarat-based firm to the US-based Target.
Welspun India Managing Director Rajesh Mandawewala yesterday told analysts in a conference call that the firm is in the process of appointing an external independent 'Big Four Auditor' to audit all of its supply systems and processes to understand the root cause.
Global retail majors Walmart and JCPenney are already investigating textiles sourced from Welspun India for product integrity, while IKEA is awaiting the outcome of a probe by the Indian firm in the wake of lapses in supplies.
Welspun, which was supplying bedsheets and pillowcases made of Egyptian cotton to Target, was alleged by the US-based retailer for substituting another type of non-Egyptian cotton when producing sheets supplied between August 2014 and July 2016.
Target has decided to terminate its contract with Welspun after an investigation.
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