Coffee Day Enterprises shares hit 20% lower circuit on Siddhartha's death news1 min read . Updated: 31 Jul 2019, 12:27 PM IST
- Coffee Day Enterprises shares hit a record low of ₹122.75 on BSE, having slumped over 44% since mid-July
- So far this year, shares have declined 56%
MUMBAI : Shares of Coffee Day Enterprises Ltd hit 20% lower circuit for the second straight day on Wednesday, falling to an all-time low, after owner V.G. Siddhartha’s body was recovered from Netravati river in Mangaluru.
The company's shares hit a record low of ₹122.75 on BSE, having slumped over 44% since mid-July. So far this year, shares have declined 56%. The stock had listed on the exchanges on 30 November 2015 at an issue price of ₹328.
"Now the unfortunate event of founder underlines the crisis in the company. This also reveals that VG Siddhartha was under tremendous pressure from other lenders. From the information available, CCD is severely affected by the slowdown in the economy and liquidity crunch. We may see the stock slide further if clarity regarding its financials is not declared," said Romesh Tiwari, head of research CapitalAim.
Tiwari said investors should avoid the stock until there was more clarity on the company’s financials.
Mint had reported that Siddhartha was in urgent talks to refinance a large portion of his outstanding debt taken in his personal capacity. This debt of ₹2,000 crore was over and above the consolidated borrowings of Café Coffee Day (CCD) group, which stood at ₹6,547.38 crore as of March.
In January, the income-tax department had provisionally attached 2 million shares of Mindtree held by Siddhartha. Also, in September 2017, the department had conducted raids on properties owned by Siddhartha and on the offices of CCD group over suspicion of tax evasion.
"The latest episode of promoter of CCD has dealt a sentimental blow to investors who are already undergoing a lot of pain. The repercussions of this event on other entities is still being calculated," said Deepak Jasani, Head Retail Research, HDFC securities.