Coffee Day Enterprises Ltd, which runs India's top coffee chain under the Cafe Coffee Day (CCD) brand, lost its froth as the firm's shares sank almost 18 per cent on their stock market debut on Monday.
The company, which counts several PE firms as shareholders, listed at Rs 313 a share on the Bombay Stock Exchange. This was 4.5 per cent lower than its initial public offering (IPO) price of Rs 328. However, the stock skid sharply to end the day at Rs 270.15 in a Mumbai market that closed 0.4 per cent lower.
The IPO, through which the company raised Rs 1,150 crore last month, had sailed through comfortably with over-subscription of 80 per cent. Subscription was led by qualified institutional buyers, who bid for 4.48 times the shares reserved for them.
The portion marked for retail investors had received bids for 89 per cent the shares on offer. The shares reserved for non-institutional investors and high net-worth individuals also weren't fully subscribed, receiving bids for 53 per cent of the quota.
The IPO valued the company at Rs 6,800 crore ($1.04 billion). The company is now valued around Rs 5,565 crore ($848 million).
The firm had raised Rs 100 crore from a group of investors, including Infosys co-founder Nandan Nilekani, Rakesh Jhunjhunwala and Ramesh Damani early this year. It counts a string of private equity backers, including KKR, New Silk Route and Standard Chartered Private Equity. Notably, no PE investor cashed out in the IPO.
Besides the coffee chain, the company also runs businesses in the logistics, financial services and hospitality sectors.