Coffee Day Enterprises share price hits 20% upper circuit; here is why

The stock jumped as the National Company Law Appellate Tribunal (NCLAT) on Thursday (February 27) set aside the insolvency proceedings against Coffee Day Enterprises, which owns the Cafe Coffee Day chain.

A two-member NCLAT bench of the Chennai bench comprising justices Sharad Kumar Sharma and Jatindranath Swain set aside an earlier order passed by the Bengaluru bench of the National Company Law Tribunal.

The latest order was pronounced in the open court, and a detailed order is still awaited.

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.

Last week, insolvency proceedings against CDEL were resumed as the appellate tribunal NCLAT could not pass the order within the specified deadline of February 21, set by the Supreme Court.

Earlier on August 8 last year, the Bengaluru bench of the NCLT (National Company Law Tribunal) admitted the plea filed by IDBI Trusteeship Services Ltd. (IDBITSL) claiming a default of ₹228.45 crore and appointed an interim resolution professional to take care of the operation of the debt-ridden company.

The suspended board immediately challenged the order before the appellate tribunal NCLAT, which on August 14, 2024, stayed the insolvency proceedings initiated against CDEL.

This NCLAT order was challenged by IDBITSL before the Supreme Court, which had on January 31, 2025, directed the Chennai bench of NCLAT to dispose of the appeal before February 21, 2025.

Coffee Day Enterprises is in trouble after the death of founder Chairman V G Siddhartha in July 2019. It is paring its debts through asset resolutions and has significantly scaled down from the time the trouble started.