Coffee Day Enterprises share price falls 53%, investors lose Rs 2,167.44 crore in market wealth

The share price of Coffee Day Enterprises has plummeted 53% amid reports founder VG Siddhartha went missing on the evening of July 29. Siddhartha's body was recovered from Netravathi river on morning of July 31. The stock hit a historic low of 89.95 after it was locked in lower circuit of 9.96% on BSE today.

Investors of Coffee Day Enterprises, the holding company of cafe chain Cafe Coffee Day have lost Rs 2,167.44 crore in market wealth since Tuesday. The market capitalisation of the firm currently stands at Rs 1900.21 crore compared to Rs 4,067.65 crore on July 29. Coffee Day Enterprises share price opened at a loss of 9.96% in trade today and is stuck at the lower circuit of 89.95 level compared to the previous close of 99.90 on BSE.  There were only sellers and no buyers for the stock. Coffee Day Enterprises share price has fallen 67.52% since the beginning of this year and lost 65.73%  during the last one year. Coffee Day Enterprises share price is trading below its 50-day and 200-day moving average of 212.10 and 254.89 on BSE.

ICRA has revised its rating 'from watch with developing implications' to 'watch with negative implications' on Coffee Day Enterprises Limited's term loans aggregating to Rs 315 crore in the wake of the developments related to the founder.

"The ratings have been put on watch with negative implication (revised from watch with developing implication) as the aforesaid development may have a negative impact on the operations of CDEL, the extent of which cannot be ascertained as yet, given the nascent stage of developments," ICRA said.

"The aforementioned development may have a critical bearing on the group's operations and credit profile," it added, stating that the credit rating agency will continue to monitor further developments and will finalise the rating action once clarity emerges on the same.

Cafe Coffee Day board has appointed SV Ranganath as the interim Chairman, while Nitin Bagmane has been named the interim Chief Operating Officer. The board has also constituted an executive committee comprising Non-Executive Independent Director Ranganath, COO Bagmane and CFO R Ram Mohan to exercise the powers previously vested with the Chief Executive Officer and the Administrative Committee that was constituted by the board in 2015.

Coffee Day Enterprises share was listed on bourses at a discount of 4.57% at Rs 313 on BSE on November 3, 2015 compared to the issue price of Rs 318.

On NSE, the stock made its debut at Rs 317, 3% below its issue price. The stock closed 18% lower at Rs 270 compared to its issue price on the same day. Analysts had attributed the fall in share price on listing day to the rich pricing of the IPO.

Coffee Day Enterprises, which runs Cafe Coffee Day (CCD) outlets, raised Rs 1,150 crore through initial public offer (IPO) from October 14, 2015 to October 16, 2015. The issue was subscribed 1.64 times at price band of Rs 316-328 a share.

Coffee Day Enterprises had raised over Rs 334 crore from anchor investors ahead of the IPO.

Edited by Aseem Thapliyal