The Welspun shock

On August 18, shares of Welspun India were trading above ₹100 apiece. In just a matter of a few sessions, the Indian textile manufacturer and seller has lost 42% of value. The stock has crashed after U.S. retailer Target Corp. said it's terminating business over claims that the company is passing off cheaper cotton sheets as premium Egyptian cotton. Now, retail behemoth Walmart Stores is said to have started a probe. On August 20, Welspun India told bourses: "We refer to a product specification issue with one client program of our subsidiary WGBL. We have initiated immediate actions to investigate the root cause. We are appointing an external auditor (one of the Big Four) to audit our supply systems and processes. This is an issue of highest priority for us and we will take all necessary steps to address it. We have an impeccable record of supplying quality products to our customers globally for over two decades. We reiterate our commitment to the highest standards of customer service and compliance." After the Walmart news broke, bourses on August 24 sought clarification from Welspun India Ltd with respect to news. Welspun India was an over ₹200 crore bet for domestic mutual funds (MFs) alone. As per Value Research data, 22 mutual fund schemes held 2,11,47,165 Welspun India shares as on July 31, 201