Coffee Day Enterprises shares jump 20% as NCLAT sets aside insolvency order

Shares of Coffee Day Enterprises surged as much as 20% in opening trade on Monday, touching its upper circuit limit of ₹25.65 on the BSE after the National Company Law Appellate Tribunal (NCLAT) set aside the insolvency proceedings against the company.

Currently, Coffee Day Enterprises shares were locked at its 20% upper circuit, with a market capitalisation of ₹542 crore. The company, which runs Cafe Coffee Day chain, has seen sharp correction in the recent past, with its stock price hitting 52-week low of ₹21.38 on February 24, 2025, plummeting 71% from its 52-week high of ₹74.54 touched on April 16, 2024.  

In an exchange filing on February 28, Coffee Day Enterprises Ltd (CDEL) informed bourses that the NCLAT Chennai allowed the appeal filed by the company and set aside the proceedings of corporate insolvency resolution process initiated against it as per the National Company Law Tribunal, Bengaluru dated August 8, 2024.

In August last year, the Bengaluru Bench of the NCLT had ordered insolvency proceedings against CDEL while hearing a petition filed by its financial creditor IDBI Trusteeship Services Limited (IDBITSL) over an alleged non-payment of dues of ₹228 crore. The tribunal had ordered to appoint an interim resolution professional to take care of the operation of the debt-ridden company.

Malavika Hegde, a shareholder and director in the company, had appealed against the NCLT order before NCLAT and managed to get a stay order on August 14, 2024. However, this was challenged by IDBITSL before the Supreme Court, which had on January 31, 2025, directed the Chennai bench of NCLAT to dispose of the pending appeal before February 21, 2025.

Last week, the corporate insolvency resolution process against the company was resumed with effect from February 22, 2025, as the NCLAT didn’t give its ruling by February 21, as per the Supreme Court’s directive.

CDEL is the parent company of Coffee Day Group which operates the Cafe Coffee Day chain of coffee houses. It also owns and operates a resort, renders consultancy services and is engaged in the sale and purchase of coffee beans. The company is in deep financial crisis after the death of founder Chairman V G Siddhartha in July 2019. Over the year, it has managed to pare most of its debts through asset resolutions.

For the third quarter of fiscal year 2025, Coffee Day Enterprises reported a net loss of ₹10.28 crore, against a profit of ₹69.18 crore in the same quarter of the previous year. The total revenue increased by 9.15% to ₹280.41 crore in Q3 FY25, from ₹256.91 crore in the same period last year. Segment wise, the coffee and related business’ revenue increased to ₹267.78 crore versus ₹245.06 crore in Q3 FY24, while the hospitality services' revenue stood at ₹13.75 crore in Q3 FY25.

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