Shares of Coffee Day Enterprises jumped 20 percent to hit the upper circuit at Rs 25.65 apiece on March 3, after an exchange filing on February 28 said that the Chennai-bench of National Company Law Appellate Tribunal (NCLAT) has ruled in its favour, dismissing the bankruptcy plea against the company by IDBI Trusteeship involving a Rs 228 crore default.
The Bengaluru bench of the National Company Law Tribunal (NCLT) had on August 8 admitted a plea by IDBI Trusteeship Services over an alleged default worth Rs 228 crore, along with appointing an interim resolution professional (IRP) to take over operations of the debt-ridden cafe chain.
Coffee Day's board immediately moved NCLAT to challenge the order, and the NCLAT stayed the Corporate Insolvency Resolution Process (CIRP) issued by NCLT on August 2024. After the IDBI Trusteeship Services challenged the NCLAT stay before the Supreme Court, the Chennai bench of NCLAT was directed to act on the appeal pending before it by February 21, 2025, failure to do would result in the plea being immediately disposed of, and insolvency proceeding being resumed.
In February 2025, the insolvency process against the company resumed as the NCLAT could not pass the order within the specified deadline, however, with the latest order by the NCLAT, the insolvency proceeding is set to be overturned.
The stock has been locked at five percent lower circuit for the past four consecutive sessions, but saw a massive surge on March 3, riding on the positive news flow. Despite the rise, the shares are significantly down from its 52-week high of Rs 74.54 and are hovering near its 52-week low of Rs 21.38.
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