Following IT raids, Coffee Day Enterprises' shares tank by almost 11%

Image: Danish Siddiqui / Reuters

 
Shares of industrialist VG Siddhartha’s Coffee Day Enterprises Ltd (CDEL) tanked almost 11 percent in afternoon trade on Monday following a four-day raid by the income tax department in Bengaluru on the company, its subsidiaries, and its founder. CDEL operates India’s largest cafe chain, Cafe Coffee Day (CCD).

A report in the The Times Of India, quoting a senior public relations officer of the income tax department in Bengaluru, on Monday, read “the department has detected over ₹ 650 crore of undisclosed income linked to Siddhartha, after four days of continuous raids”. The IT raid took place between September 21 and September 24.

An email sent to VG Siddhartha on the matter met with no response till the time this article was published on the web. CDEL has issued a clarification to the stock exchanges stating “we submit that there is no information discovered which would have a significant impact on the financial position on Coffee Day Enterprises and its subsidiaries”.

CDEL’s shares were trading at Rs 210 apiece as against its closing share price of ₹ 231.90 on Friday, September 22. Besides CCD, CDEL has business interests in sectors such as real estate, logistics, financial services and hospitality. CDEL, along with VG Siddhartha in his personal capacity, hold close to 20 percent stake in mid-tier IT firm Mindtree, which is valued at about ₹ 1,500 crore.