Coffee Day Enterprises ends 18% lower on debut day

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Moneycontrol Bureau It was a disastrous debut day for Coffee Day Enterprises at Dalal Street. The company, which is primarily into coffee business, did not see many takers as it opened for trade on Monday. Shares of CCDEL ended at Rs 270.45 on the NSE. It lost 19 percent intraday from its issue price of Rs 328 per share. Pre-opening rate was at Rs 317 per share.On the BSE, it ended at Rs 270.15, down Rs 57.85, or 17.64 percent, touching an intraday high of Rs 318 and an intraday low of Rs 266. It was trading with volumes of 3,799,555 shares on BSE. The company which operates popular brand Cafe Coffee Day had opened IPO for subscription during October 14-16 and was subscribed 1.64 times at price band of Rs 316-328 a share.The Rs 1150-crore IPO had raised over Rs 334 crore from anchor investors ahead of the IPO, while in March, the firm had mobilised Rs 100 crore in a pre-IPO funding from Nandan Nilekani and Rare Enterprises (owned by Rakesh Jhunjhunwala), among others.Coffee Day Enterprises is the parent company of Coffee Day Group and operates coffee business through a subsidiary, Coffee Day Global Ltd (earlier known as Amalgamated Bean Coffee Trading Company Limited) and its subsidiaries.Apart from the Café Coffee Day chain, the holding company houses other businesses like development of IT-ITES technology parks (Tanglin Development Limited), logistics (Sical Logistics), financial services (Way2Wealth Services), hospitality (Coffee Day Hotels & Resorts Private Ltd) and investments in companies like Mind Tree.On consolidated basis, the company incurred a net loss of Rs 77 crore in FY15, up from Rs 21.40 crore in year-ago period. In the nine-month period ending December 2014, the company had a loss of Rs 75.2 crore.

VG Siddhartha, CMD, Coffee Day Enterprises, says the company will be profitable this year. The parent company's consolidated debt is Rs 625 crore post the IPO and half the money raised will go into repaying debt. Over the next 5 years, the company does not plan to use any money raised via the IPO for the growth of non-coffee retail business, he says.

Posted by Nasrin SultanaFollow @NasrinzStory