Coffee Day Enterprises Share Price rises 20% Hits Upper Circuit: NCLAT Dismisses Insolvency Proceedings

Market Performance

On March 3, 2025, the shares of Coffee Day Enterprises Ltd (CDEL) reached their upper circuit limit of ₹25.65 during intra-day trading. This development followed the National Company Law Appellate Tribunal (NCLAT) decision to dismiss insolvency proceedings against the company. Before this, the stock had experienced a prolonged decline, registering losses over 11 consecutive sessions since January 13, 2025.

Key stock performance data:

• Current Price: ₹25.65
• 52-Week High: ₹74.54 (April 2024)
• 52-Week Low: ₹21.38 (February 24, 2025)
• Recent Performance:
  • January 2025: Gained 15%
  • February 2025: Declined 18%
  • Overall decline 62%

NCLAT Decision and Legal Developments

The insolvency case involving Coffee Day Enterprises originated from a petition filed by IDBI Trusteeship Services Ltd. (IDBITSL). The case pertained to an alleged payment default of ₹228.45 crore. On August 8, 2024, the National Company Law Tribunal (NCLT) admitted the plea and appointed an interim resolution professional to manage CDEL's operations.

Following this development, the company's board contested the ruling before NCLAT. As part of the appeal process:

• On August 14, 2024, NCLAT temporarily stayed the insolvency proceedings.
• After a Supreme Court directive, NCLAT was required to resolve the appeal by February 21, 2025.
• NCLAT, comprising Justices Sharad Kumar Sharma and Jatindranath Swain, ultimately dismissed the insolvency case.

With this ruling, operational control was restored to Coffee Day Enterprises.

Background of the Insolvency Case

The insolvency petition filed by IDBI Trusteeship Services was based on claims of unpaid dues amounting to ₹228.45 crore. After the NCLT accepted the insolvency request, an interim resolution professional oversaw the company's operations.

Subsequently:

• The company filed an appeal with NCLAT, securing an interim stay on the proceedings.
• The matter was escalated to the Supreme Court, which mandated a resolution deadline.
• NCLAT concluded the matter by dismissing the insolvency proceedings, thereby closing the case in favour of Coffee Day Enterprises.

Summary

NCLAT's dismissal of the insolvency proceedings against Coffee Day Enterprises marks a key legal development for the company. Following the tribunal's decision, operational control has been returned to the company's board, concluding the legal dispute over the ₹228.45 crore default case.

While the company's stock has recovered in response to the ruling, it continues to trade well below its historical highs, reflecting recent volatility and financial pressures experienced over the past year.