Escape Revolution

Cafe Coffee Day share falls 20% to hit historic low after death of founder VG Siddhartha

Cafe Coffee Day share falls 20% to hit historic low after death of founder VG Siddhartha

Shares of Coffee Day Enterprises plunged 20% for second straight day after Coffee Day Enterprise MD and Chairman VG Siddhartha’s body was recovered from Netravathi river on Wednesday morning. He was missing since Monday evening.

The shares opened on yesterday’s locked value of Rs 154.05 and shredded 20% more to hit another all-time low of Rs 123.25 on BSE. On NSE, the stock has hit Rs 122.75.

The stock now has overall lost 37% in 2 days. The market capitalisation has reduced to Rs 2,603.68 crore from Rs 3,254.33 crore on Tuesday. On Monday, the market capitalisation of Coffee Day Enterprises stood at Rs 4067.65 crore, prior to reports of Siddhartha going missing. Coffee Day’s market capitalisation was at its peak on September 19, 2018, at Rs 6,678 crore.

The Coffee Day Enterprises’ share is trading below 30, 50, 150 and 200 days moving average. The stock of Coffee Day has fallen over 50% in the last 6 months and over 38% in a week on both the bourses.

Siddhartha’s body was finally recovered around 6:50 am on Wednesday morning. VG Siddhartha’s body might be shifted to his hometown Chikkamagaluru at 11:00 am, suggest reports.

“We found the body early morning today. It needs to be identified, we have already informed the family members. We are shifting the body to Wenlock Hospital. We will continue the further investigation,” said Mangaluru Police Commissioner Sandeep Patil.

As of June 2019, nearly 76% of VG Siddhartha-led promoter group’s 53.93 per cent equity holding in Coffee Day Enterprises had been pledged, according to data shared with stock exchanges.

Meanwhile, 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 cr, based on the subject material,’it has been reported that the Coffee Day group’s promoter Mr. VG Siddhartha has gone missing’ on July 30, 2019.

“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.”

“The aforementioned development may have a critical bearing on the group’s operations and credit profile,” ICRA’s filing further added stating that the credit rating agency will continue to monitor further developments and will finalize the rating action once more clarity emerges on the same.

On a separate note, another listed company owned by VG Siddhartha, Sical Logistics’ share has taken a similar beating like the CCD stock and fell to 20% lower circuit on both the days (Tuesday and Wednesday). VG Siddhartha held 0.68% stake in Sical Logistics as of June quarter. On Wednesday, the stock price of Sical Logistics fell as much as 20% to a fresh 52-week low of Rs 58.25 on BSE. Similar to CCD share, Sical Logistics has no buyers bidding but only sellers with offers. It also tops the list of major losers on BSE platform like Cafe Coffee Day share.

In a recent developement, Cafe Coffee Day board after its meeting held today, has appointed SV Ranganath as the interim Chairman of the board, while Nitin Bagmane has been named the interim Chief Operating Officer of the company. 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.

Moreover, the board has also appointed Cyril Amarchand Mangaldas as its legal counsel to advise it in the foregoing and related matters.