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Default Allegation Results In 15% Drop In Coffee Day Enterprises Stock
Shares of Coffee Day Enterprises crashed 15% on September 11, 2023, after IDBI Trusteeship Services filed a default application against the company before the National Company Law Tribunal. The application was filed under Section 7 of the Insolvency and Bankruptcy Code for alleged default of Rs 228.45 crore.
September 11, 2023: The company has faced financial difficulties recently. In the first quarter of fiscal year 2023-24, Coffee Day Enterprises reported a net profit of Rs 21 crore, down from Rs 124 crore in the same quarter of the previous year. Revenue also declined by 1% to Rs 247 crore.
The default application is a significant setback for Coffee Day Enterprises, one of India’s leading coffee chains.
Company denies default
In a regulatory filing, Coffee Day Enterprises said it has not defaulted on any financial obligations. The company said it is discussing with IDBI Trusteeship Services to resolve the matter.
Investors sell off shares
The news of the default application triggered a sell-off in Coffee Day Enterprises shares. The shares fell to a low of Rs 47.45 on the NSE in the morning trade. The stock had closed at Rs 55.50 on the previous day.
Company’s financial performance
Coffee Day Enterprises reported a net profit of Rs 21 crore in the first quarter of fiscal year 2023-24. Revenue grew 18% to Rs 247 crore during the quarter.
The default application by IDBI Trusteeship Services is a significant setback for Coffee Day Enterprises. The company faces financial difficulties, and the default could further erode investor confidence. The company must resolve the matter and improve its financial performance to regain investor trust.
In addition to the above, here are some other things to keep in mind:
Coffee Day Enterprises is a leading coffee chain in India. It operates over 495 cafes in 158 cities.
The company also faces challenges like rising competition and increasing debt.
The default application by IDBI Trusteeship Services could harm the company’s operations and financial performance.
Investors should monitor the situation closely and take appropriate action if necessary.
An overview of Cafe Coffee Day
Siddhartha. Veerappa Gangaiah Siddhartha Hegde ( 1959 – July 29, 2019) was an Indian businessman from Karnataka. He was the founder of the cafe chain Café Coffee Day and served as its chairman and managing director. The first CCD outlet was set up on July 11, 1996, at Brigade Road, Bangalore, Karnataka. It rapidly expanded to other cities in India, with more than 1,000 cafés open across the nation by 2011
The default application is a significant setback for Coffee Day Enterprises, one of India’s leading coffee chains. The default application by IDBI Trusteeship Services is a further blow to Coffee Day Enterprises. The company is now facing the possibility of being taken over by a liquidator. It could have a significant impact on the company’s operations and employees.
