Coffee Day share price tanks 17% after NCLT orders insolvency proceedings

Last week on August 8, NCLT's Bengaluru bench gave approval for the appeal from IDBI Trusteeship Services Ltd that claimed a default of Rs 228.45 crore. (AP file photo)

Coffee Day’s share prices nosedived over 17 percent in the August 12 session on the back of last week’s insolvency order by the National Company Law Tribunal.

Coffee Day stock price opened at Rs 38 on the Bombay Stock Exchange on August 12, the stock touched an intraday low of Rs 37.55 and an intraday high of 41.05. Latest data shows that Coffee Day stocks were among the worst performers.

After declining 19 percent in early trade, the stocks recovered slightly to Rs 39.21 apiece.

Last week, the Bengaluru bench of the NCLT had initiated the bankruptcy proceedings against Coffee Day Group’s parent company Coffee Day Enterprises Ltd.

Coffee Day. The insolvency has been initiated under the rules of the Insolvency and Bankruptcy Code (IBC).

A quorum of technical member Manoj Kumar Dubey and judicial member K Biswal have appointed an interim resolution professional to takeover the operations of the CDEL. According to the official order, Ashish Chhawchharia has appointed as the IRP. Meanwhile, IDBITSL has been ordered to deposit Rs 2 lakh to cover the expenses that the IRP will have to bear towards inviting claims, issuing public notices among other things.

Last year, NCLT Bengaluru had admitted an insolvency plea against CDEL on July 20 over a petition filed by IndusInd Bank. However, NCLAT stayed that a month later on August 11, 2023. Later, both parties had reached for a settlement.

Cafe Coffee Day was promoted by late VG Siddhartha who allegedly died by suicide in 2019.