Coffee Day Enterprises shares crack 20 pc after chairman goes missing
New Delhi: Shares of Coffee Day Enterprises Ltd dropped 20 per cent on Tuesday, eroding Rs 813 crore from its market valuation, after reports surfaced that its Chairman and Managing Director V G Siddhartha has gone missing.
The scrip tumbled 19.99 per cent to Rs 154.05 -- its 52-week low as well as its lower circuit limit -- on the BSE. On the National Stock Exchange (NSE), shares plummeted 20 per cent to its lowest trading permissible limit for the day as also its one-year low of Rs 153.40 apiece. Led by the massive drop in its share price, the company's market valuation dived Rs 812.67 crore to Rs 3,254.33 crore on the BSE. "CCD shares have been hitting 52-week lows for quite some time in the last couple of months. Now, the unfortunate event of founder missing and in the light of the alleged letter left by him clearly underlines the crisis in the company.
"We may see the stock to slide further to double digits if the clarity regarding its financials is not declared. The case reminds us of the notorious case of Satyam fiasco," said Romesh Tiwari, head of research, CapitalAim. Umesh Mehta, head of research, Samco Securities, said that the Nifty marked a gloomy day on the stock markets with a key industrialist going missing and the stock of Coffee Day Enterprises hitting the lower circuit. In a filing to the BSE on Tuesday, the company said, "V G Siddhartha, chairman and managing director of Coffee Day Enterprises Ltd, is not reachable since yesterday (Monday) evening.
We are taking the help of concerned authorities." "Company is professionally managed and led by competent leadership team, which will ensure continuity of business," the filing added. Siddhartha, the son-in-law of former Karnataka chief minister S M Krishna, was headed for Sakaleshpur but on the way, he had asked his driver to go towards Mangaluru, according to the police. On reaching a bridge over the Netravati river in the Kotepura area in the Dakshina Kannada district, he got down from the car and told his driver that he was going for a walk. "He (Siddhartha) asked the driver to wait till his arrival. When he did not return even after two hours, the driver approached the police and lodged a missing complaint," Deputy Commissioner of Dakshina Kannada district Senthil Sasikant Senthil told PTI.
Meanwhile, the state government has launched search operations in the Netravati bridge area. "I have failed as an entrepreneur," V G Siddhartha, who has gone missing, has said in a letter purportedly written to the Board of Directors and employees of Coffee Day Enterprises he founded. There was no immediate confirmation on whether the letter was written by him, though it was written in his letter head with signature. "This is complete panic and now, the ripple effects are seen to its lenders as well," Mustafa Nadeem, chief executive officer of Epic Research, commented on stock crash of 20 per cent after the CCD owner went missing.