Coffee king VG Siddhartha, whose Cafe Coffee Day (CCD) was India's answer to Starbucks and Costa Coffee, was found dead on the banks of Netravati River in Mangaluru on Wednesday morning. His body was found after 36 hours of an intense search operation by the Karnataka Police and NDRF. VG Siddhartha's letter had alleged harassment by the income tax authorities and a private equity partner, which allegedly caused a liquidity crunch in his company. Under pressure over rising competition and a debt of over Rs 6,500 crore, VG Siddhartha said in his letter that he failed as an "entrepreneur".
So how VG Siddhartha set up a coffee empire in India? He was born to a family of coffee planters in Karnataka's Chikmagalur. He set up India's first coffee chain Cafe Coffee Day (CCD) in Bengaluru in 1996. He was married to former Karnataka Chief Minister SM Krishna's first daughter Malavika. The couple has two sons. Born in the Malenadu region of Karnataka's Chikkamagaluru district, Siddhartha got his master's degree in Economics from Mangalore University. He started investing in the stock market and went on to join JM Financial Limited in 1983-84 in Mumbai as a management trainee. He was 24 years old at that time.
Also read: From 1 store in 1996 to 2,100 today, how coffee king made CCD a global brandÂ
After working for two years with JM Financial Ltd, he returned to Bangalore where his father gave him money to start a business of his choice. Siddhartha bought a stock market card for an amount of Rs 30,000 and a company called Sivan Securities. The company's name was changed to Way2wealth Securities Ltd in the year 2000. Siddhartha became a full-time investor in the stock market and also owned 10,000 acres of coffee farms by 1985. As the years went by, his wealth doubled with the liberalisation of coffee trading in the 1990s.
He then floated Amalgamated Bean Coffee Trading Company Ltd (ABCTCL) in the year 1993. This company focused on coffee exports and became the second-largest exporter from India. ABCTCL is now known as Coffee Day Global. Siddhartha opened the first CCD store in 1996 at Bangalore's busy Brigade Road. A cup of coffee and an hour of internet surfing used to cost Rs 100 at that time. The cafe was a big hit amongst the urban dwellers. Siddhartha in the year 2000 invested in tech company MindTree through Coffee Day Global's subsidiary Coffee Day Trading. The coffee king also had an interest in the hospitality sector. He launched hospitality chain Coffee Day Hotels & Resorts in 2006 which operates the Serai and Cicada resorts.
According to Forbes, Siddhartha's net worth stood at $1.2 billion (Rs 8,200 crore) in 2015.
Also read: 76% equity owned by VG Siddhartha-led promoter group had been pledged
In 2017, Siddhartha found himself in midst of a controversy when he was accused of tax evasion following which the I-T department conducted raids at over 20 locations, including his offices in Mumbai, Chennai, Bengaluru and Chikmagalur. The documents seized during raids revealed that Siddhartha had concealed income worth Rs 650 crore from the I-T department.
A statement from the I-T department said, "The searches in a group involved in coffee, tourism, information technology and other areas concluded with an admission of previously concealed income exceeding Rs 650 crore. The detection of undisclosed income is expected to be a much higher figure," adding, "There are a number of other issues including violations of other statutes on which there is no disclosure but relevant evidence has been found, these will be pursued effectively with vigour, energy and imagination."
Siddhartha sold his 20.41% stake in Mindtree to Larsen and Toubro (L&T) for Rs 3,269 crore through a block deal this year.
Besides this, Siddhartha also planned to sell technology park subsidiary Tanglin Developments to Blackstone. However, the proposed sale fell through after he decided against it in June 2019.
Also read: CCD owner's alleged letter says he's 'sorry to let down all the people'
Soft drinks maker Coca-Cola had reportedly initiated preliminary talks with Cafe Coffee Day (CCD) recently to acquire a substantial stake in India's largest coffee chain. Siddhartha sought a valuation of Rs 8,000 to Rs 10,000 crore from soft drinks maker Coca-Cola for the stake sale in his coffee chain. Siddhartha also sat on the boards of MindTree, GTV, Liqwid Krystal, Way2Wealth and Ittiam.
Today, his company is profitable and Coffee Day Enterprises' total tangible assets are valued over Rs 18,000 crore. Coffee Day Global Limited, that runs the coffee chain, has a footprint of over 1,600 stores with 54,000 vending machines and more than 500 express stores.
Edited by Manoj Sharma