Coffee Day Enterprises Shares Fall 20% After VG Siddhartha Goes Missing
The stock fell 19.99 percent to Rs 154.05 per share—its 52-week low as well as its lower circuit limit—on the Bombay Stock Exchange.
On the National Stock Exchange, CCD shares fell 20 percent to hit the lower circuit and its one-year low of Rs 153.40 apiece.
"CCD shares have been hitting 52-week lows for quite some time in the last couple of months. Now, the founder missing and the alleged letter left by him clearly underlines the crisis in the company,” said Romesh Tiwari, head of research at financial advisory CapitalAim.
"We may see the stock slide to double digits if the clarity regarding its financials is not declared. The case reminds us of the notorious case of Satyam fiasco," said Tiwari.
Umesh Mehta, head of research at online stockbroker Samco Securities, said that Nifty marked a gloomy day for the stock markets, with VG Siddhartha going missing and Coffee Day Enterprises hitting the lower circuit.
Coffee Day Enterprises did apprise the BSE of its founder missing.
"VG 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,” it said in a regulatory filing. “The company is professionally managed and led by competent leadership team, which will ensure continuity of business.”
Siddhartha, the son-in-law of former Karnataka Chief Minister SM Krishna, was headed for Sakaleshpur in Karnataka on Monday evening but, on the way, asked his driver to go towards Mangaluru, according to the local police.
Upon reaching a bridge over the Netravati river 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," said Senthil Sasikant Senthil, deputy commissioner of Dakshina Kannada district.
The state government has launched a massive search for him in the area.