Cafe Coffee Day IPO – Should you Invest?

Cafe Coffee Day IPO Review

Coffee Day Enterprises Ltd (CDEL), the holding company of the Cafe Coffee Day (CCD) chain of restaurants founded by V.G. Siddhartha, has set 14 October 2015 as issue open date for its Rs.1,150-crore Initial Public Offering (IPO). Let us review the Cafe Coffee Day IPO in this post.

CDEL has outstanding loan amounting to Rs 632 Crores. It plans to utilize the funds to repay this loan and rest of the amount to open Outlets and other infrastructure building activities.

cafe-coffee-day-ipo

Besides being the biggest in nearly three years, it is also being seen as initiator of the much-awaited revival in the IPO market as it could be followed by a number of big brands such as Infibeam — the first e-commerce firm to launch an IPO in India — and InterGlobe Aviation Ltd that operates the country’s most successful airline under IndiGo brand (IndiGo IPO Review).

Read Information about Allotment Status : Cafe Coffee Day IPO Allotment Status

About Cafe Coffee Day (CCD) : 

cafe-coffee-day-locations

Cafe Coffee Day is a Chain of Coffee outlets chain run by Coffee Day Global Ltd (formerly known as Amalgamated Bean Coffee Trading Co. Ltd) which is subsidiary company of Coffee Day Enterprises Ltd (CDEL). Presently, under the flagship brand of Cafe Coffee Day, CDEL operates around 1500 outlets across 209 cities in India and 16 international outlets across Malaysia, Austria and the Czech Republic. As of December 2014, CCD has dominated Indian Chained Cafe outlets with 46% market share. Apart from the coffee, the company also operates in ITES, technology parks, logistics, financial services and hospitality.

Cafe Coffee Day (CCD) Promoters : 

V G Siddhartha, who is the main promoter as well as Chairman and MD, holds 54.78 per cent stake. Mr Siddharta is son-in-Law of Former Karnataka Chief Minister S.M.Krishna. 

Mr. Nandan Nilekani, Infosys co-founder and former chief of UIDAI, has 1.77 per cent stake. All promoters together have 92.74 per cent holding in the company.


~*Advertisement*~

~*End Of Advertisement*~


 

Cafe Coffee Day (CCD) Share Price: 

The Cafe Coffe Day Share Price Band is fixed between  Rs.316 to Rs.328 per equity share

Cafe Coffee Day (CCD) IPO Issue Dates: 

The Cafe Coffe Day IPO opens on 14th October 2015 and closes on 16th October 2015.

Cafe Coffee Day (CCD) IPO Other Details: 

  • Issue Type: 100% Book Building
  • Issue Size: Rs.1,150 crore
  • Face Value Per Share: Rs.10
  • Issue Price Band: Rs.316– Rs.328
  • Minimum Order Value: Rs.14,220 to Rs.14,760
  • Minimum Bid Lot: 45 Equity Shares
  • Listing on Exchanges : BSE and NSE

Cafe Coffee Day IPO Analysis: 

     Positives : 

  • You can find the Cafe Coffee Day outlets at almost all major cities. Consider this, its nearest competitor Barista, has only 169 outlets compared to CCD’s 1472 outlets
  • Cafe Coffee Day is able to to maintain the price at lower range and its “for young at heart” tag line is successful in winning hearts of youngsters. On contrary, the competitor, StarBuck’s pricing is on higher end & almost deemed as beverages of Rich!
  • The holding company CDEL is into diversified business, apart from the coffee chains it also into logistics, ITES and financial service
  • Mr.VG Sidhartha has strong political back up.

   Negatives

  • Because of its affordable price, the profit margin is very thin
  • When compared to the number of outlets, its per day per outlet sale (Rs 20,000) is way less than StarBuck’s (Rs 60,000)
  • The figures of CCD are in red for three consecutive years, See below the figures taken from the CCD Red Herring Prospectus
CDEL Performance (In Crores)
ParticularsFY 2009/10FY 2010/11FY 2011/12FY 2012/13FY 2013/14Nine Months Ended 31Dec14
Total income694.21,096.91,633.82,149.12352.71808.6
Profit/(loss) before tax(38.1)14.9(12.8)(63.8)(141.6)(135.6)
Net profit/(loss) after tax(27.5)17.519.3(21.4)(77)(75.2)

Cafe Coffee Day (CCD) IPO Other Information: 

Cafe Coffee Day Company Contact Information :
Coffee Day Enterprises Ltd
Coffee Day Square,
Vittal Mallya Road,
Bangalore 560 001 Karnataka
Email: investors@coffeeday.com
Phone: +91 80 4001 2345
Cafe Coffee Day IPO Prospectus:
Download the Cafe Coffee Day IPO Prospectus

Conclusion: 

That is the review and analysis of the Cafe Coffee Day IPO. Going by the performance of the company in last 5 years, in which it has made profit of Rs 36 Crores in 2 years and Loss of Rs 200 Crores in remaining 3 years, we can say that CCD is not the listing which you would mind missing. It is also worth noting that, around 1/3rd of the funds will be used to retire the loan of the company. Take your informed decision as far as this IPO is concerned. If you are interested in applying for the IPO, you can have look at 10 Best Stock Brokers of India. You may also be interested in reading our other articles at Archives Page.

Read : Introduction to demat account and What is the procedure to open it?

And, you can subscribe to our newsletter below for the detailed analysis of the next upcoming IPOs. Consider sharing this review with your friends interested in this IPO through the Social buttons on your left/below.

  • vipin yadav

    I Have doubt on this company with following no of tax related cases and amount involved.they have investors from mauritus (like KKR) and singapore and you better know about these countries in terms of taxation(known as tax havens). Due to political background these guys expanded themself into real state sector also.
    Litigation against Subsidiaries.CASES About Tax proceedings – no of cases (148 ) and 13,636.85 (in million of inr.).is involved. and this amount is roughly equal to the money raised from the market.

  • KHUSHBOO GUPTA

    Siddhartha is just Name sake, Real Show runner is his FIL S.M.Krishna !


Copyright ©2017 theindianstockbrokers.com | All Rights Reserved | Useful Articles | Privacy Policy | Terms of Use | Sitemap |

Disclaimer: theindianstockbrokers.com has taken due care and caution in compilation of data for its web site. Information has been obtained from different sources which it considers reliable. However, theindianstockbrokers.com does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. theindianstockbrokers.com especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. All Logos & Trademark belongs to their respective owners. The Information on Brokerage charges, trading platforms, background, and others have been acquired from customer support teams and/or from the respective company websites and brochures . If you are a brokerage firm and find any discrepancy, please Contact Us