Cafe Coffee Day Enterprises experienced a decline of 15%, in its stock price on September 11th as a result of a default application made by Trusteeship Services. In response, Coffee Day sought advice. This development came after the NCLAT decision on August 11th to temporarily suspend Coffee Day Global’s admission, into insolvency pending clarification of matters.
Coffee Day Enterprises witnessed a steep 15 percent drop in its shares on September 11th, tumbling to a low of Rs 47.45 on the NSE during morning trading.
This plunge was triggered by IDBI Trusteeship Services’ filing of a default application against Coffee Day before the National Company Law Tribunal.
On September 8th, in a regulatory disclosure, Coffee Day Enterprises revealed that IDBI Trusteeship Services had initiated proceedings under Section 7 of the Insolvency and Bankruptcy Code, alleging a default of Rs 228.45 crore. In response, Coffee Day stated its intention to seek legal counsel and take all necessary actions to safeguard its interests in this matter.
This situation was further complicated by a prior decision on August 11th when the National Company Law Appellate Tribunal (NCLAT) temporarily halted the admission of Coffee Day Global into the insolvency process. The NCLAT cited unresolved points requiring clarification and instructed IndusInd Bank to submit its response within two weeks.
The upcoming hearing for this case is scheduled for September 25th. The saga began on July 20th when the Bengaluru bench of the National Company Law Tribunal (NCLT) admitted Coffee Day Global, the operator of the Cafe Coffee Day chain, into insolvency. This move came after IndusInd Bank filed a petition alleging a default of Rs 94 crore.
In a more positive financial development, Coffee Day Enterprises reported a net profit of Rs 21 crore in August 2023, a remarkable turnaround from the Rs 17 crore loss recorded in Q1FY22. Additionally, their revenue surged by 18 percent, reaching Rs 247 crore.
Notably, Coffee Day Global Enterprises boasts ownership of 495 cafes across 158 cities and has established 285 CCD Value Express kiosks and vending machines in various workplaces and businesses.
