Rating agency ICRA cautious on Coffee Day group following Siddhartha’s disappearance and death

Shares of Coffee Day Enterprises Ltd further plummeted 20% to hit its lowest trading permissible limit for the day on Wednesday after its Chairman and Managing Director V.G. Siddhartha’s body was found.

The body of Café Coffee Day founder V.G. Siddhartha, who had gone missing, was found on Wednesday, July 31, in the Nethravati river in Dakshina Kannada district of Karnataka after 36 hours of intense search, officials said.

The scrip tumbled 20% to ₹123.25 — its 52-week low level as well as its lowest trading permissible limit for the day — on the BSE.

At the NSE, it dropped 20% to hit its one year low as also its lower limit of ₹122.75.

In two days, the company’s market valuation has tanked by ₹1,463.32 crore to ₹2,603.68 crore on the BSE.

Shares of Coffee Day Enterprises Ltd dropped 20% on Tuesday too, after reports surfaced that Siddhartha had gone missing.

ICRA cautious on CCD group

Meanwhile, rating agency ICRA has placed term loan rating of Coffee Day Enterprises Limited on watch with negative implications.

“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 in a statement.

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

“Situation being assessed”

Café chain operator Coffee Day Enterprises on Tuesday had said it was evaluating and assessing the situation after its chairman went missing since Monday evening.

The company’s board has held emergency meeting following disappearance of Siddhartha and also reviewed the letter purportedly signed by him and shared copies with relevant authorities, Coffee Day Enterprises said in a regulatory filing.

The company said it has resolved to co-operate with authorities.

The purported letter sent by Siddhartha to the CCD board claimed that he was being pressured by “one of the private equity partners” forcing him to buy back shares, a transaction he had partially completed six months ago by borrowing a large sum of money from “a friend”.

(With inputs from Vikas Dhoot)

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