Veteran investor Dolly Khanna has acquired a fresh 1.55% stake in Coffee Day Enterprises by picking up 32.78 lakh shares in the June 2025 quarter. The investment of INR 14 crore is a big development in the revival story of a company that was once on the brink of collapse.
This move has rekindled interest in the iconic Indian brand Café Coffee Day (CCD).
A Surprise from a Cautious Investor
Dolly Khanna is known for her research and conservative approach. She prefers long-term plays over short-term bets. With a portfolio of over INR 450 crore in 16 stocks including Zuari Industries, GHCL, Polyplex Corporation and Prakash Industries, her stake in Coffee Day Enterprises is notable not just for the size but for the high-risk risk high-reward nature of the investment.
This is the first time her name has appeared in the shareholding pattern of Coffee Day Enterprises above 1% public disclosure threshold.
Coffee Day Enterprises: A Company with Scars and a Story
Founded in 1996 by the late V.G. Siddhartha, Coffee Day Enterprises is a diversified conglomerate engaged in coffee retail, trading, real estate leasing, hospitality, financial services, and IT-enabled services. The company has India’s largest café chain under Café Coffee Day and has a presence in international markets like Europe and Japan.
But the once celebrated company faced huge trouble after Siddhartha’s death in 2019 which came amidst growing financial stress and corporate governance issues. The aftermath saw sales, profits and investor confidence plummet, and the stock went from all all-time high of INR 375 (Jan 2018) to lows of INR 21.38 in early 2025.
A Turnaround Led by Malavika Hegde
In late 2020, Malavika Siddhartha Hegde, Siddhartha’s wife, took over as CEO and set out to save the sinking ship. Her leadership has been credited with:
- Reducing debt by over 80%, from INR 7,000 crore in FY20 to INR 1,373 crore in FY25.
- Divesting non-core assets, Sical Logistics and Global Village Tech Park.
- Shutting down loss-making outlets and focusing on profitable ones.
All this has improved the balance sheet with FY25 showing net losses of INR 143 crore (vs. INR 307 crore in FY24) and revenues stabilising at INR 1,078 crore.
Market Reaction
After Dolly Khanna’s stake disclosure, Coffee Day shares went up 10% two days in a row, closing at INR 39.86 on 16 July, the highest in 10 months. The stock has risen 70% this year and 86% from its February low.
Trading volume was heavy with over 85 lakh shares changing hands on 16 July, nearly 11x the 10-day average.
Still a Bumpy Road Ahead
Despite the enthusiasm, Coffee Day’s fundamentals are still fragile:
- As of 30 June 2025, the company had outstanding debt of INR 372.5 crore, including defaulted loans of INR 181.66 crore.
- SEBI has slapped a fine of INR 26 crore on the company for historical fund diversion by subsidiaries to Mysore Amalgamated Coffee Estates (MACEL), demanding recovery and independent audits.
- Auditors are still expressing doubts about the company’s ability to continue as a going concern, citing governance issues and recurring audit qualifications.
Why Dolly Khanna Might Be Interested
So what makes this distressed company attractive to Dolly Khanna?
- Deep Value: With a market cap of INR 842 crore and the stock at a discount to its peak, the valuation could work if the turnaround sustains.
- Debt Rationalisation: Massive debt reduction has reduced the default risk.
- Signs of Revival: Margins are improving, losses are narrowing, and core business is stable under new management.
- Brand Value: Café Coffee Day is a well-known and nostalgic brand in urban India with revival potential.
Bottomline
Dolly Khanna’s move is being seen as a contrarian play, believing in Malavika Hegde’s leadership and the turnaround. But this is not risk-free.
Coffee Day Enterprises still has to resolve legacy issues, get long-term funding and restore credibility with lenders and shareholders. Investors should be aware of the company’s history and ongoing debt restructuring.
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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers are encouraged to consult financial advisors before making investment decisions.