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Cafe Coffee Day IPO - To Invest or Skip

We all are aware about the Cafe Coffee day outlets running under Coffee day enterprises Ltd and one may get excited about the IPO of the company seeing the activity in their coffee shops. However;before you plunge for the IPO of Cafe Coffee day; you must go through this post as it will help you to arrive at a logical decision whether to go for this IPO or give it a skip.


Company NameCoffee Day Enterprises Limited
Issue Period
October 14 - October 16, 2015.
Price Band
Rs. 316/- – Rs. 328/- per equity share.
Lot Size
45 shares & in multiple of 45 shares thereafter.
Issue SizeRs.1150 cr.   
Face ValueRs.10 each.
ListingTo be listed on NSE & BSE.
Who Can InvestResident Indian individuals, HUF, Companies, Corporate Bodies, Scientific Institutions, Societies and Trusts, NRIs, FPIs.

Highlights of the Company
  • Coffee Day Enterprises is engaged in coffee business through subsidiary, Coffee day Global limited. Company has established the largest footprint of cafe Outlets in India as of 31st Dec 2014 with a network of 1538 cafe outlets spread across 219 cities.
  • Company has a market share of approximately 46% in terms of chained cafe outlets.
  • Companies brand Cafe coffee day is ranked 2nd in the most trusted brands in the food service retail category in India and was one of the only four indigenous India brands to be recognised as the Most Exciting Indian Brand in India in 2014.
  • Company is also engaged in coffee trading through CDEL and Coffee day trading limited.
  • Company is also involved in Procuring, processing and roasting of Coffee beans to retailing of coffee products across various formats.
Verdict

So far so good for the rosy picture and we come to the crux point which is hidden in the balance sheets is that the company has been making losses consistently for past 3 years and thus it is better to give it a skip as company has priced its IPO very aggresively. One may consider for an investment in this stock post listing euphoria dies down and one may be able to get this stock at a much better valuation.

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