VG Siddhartha of Cafe Coffee Day: A `Failed` Entrepreneur? |
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By the time Siddhartha completed his graduation in the year 1983, he had developed an interest in stock trading. Later, he wanted to start his own business in stock trading. VGS convinced his father and went to Bombay (Now Mumbai) in 1983 to start a career in stock trading.
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VGS was inspired by Mahendra Kampani (Kampani), a senior stock trader and also a partner in India’s oldest stock trading firm Jamnadas Morarjee and Co. Kampani had also worked in various capacities in the Bombay Stock Exchange (BSE) since 1982. He was a sitting member of the governing board and vice-president and also served as president for one term (1987-88) . He was one of the pioneers in introducing stock market reforms.
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PayPal (11 USD)
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| Along with the stock trading business, VGS started showing a keen interest in coffee plantations. He had inherited 300 acres of coffee plantations from his father and forefathers. He also started purchasing coffee plantations in 1985... |
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| By the year 2000, CCD had opened 1,700 cafés in different parts of the country and was focussing primarily on creating an environment where people could leisurely spend time on enjoying a cup of coffee. In the early days, CCD offered a cup of coffee at Rs. 100. This included an hour of browsing the internet. . |
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| VGS expected competition to CCD from international players, but much to his surprise, he faced unexpected competition from a domestic company, Barista Coffee Company Limited (Barista). Barista, launched in early 2000, opened 20 stores in Mumbai and 20 stores in Delhi in the year 2000 itself, while CCD was operating only 20 stores in all... |
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| While focussing on creating a sustainable coffee brand, VGS also concentrated on diversifying his investment portfolio. His first business, Sivan Securities, was successful in providing stock broking and investment advisory services. .. |
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| The growing competition from domestic and international players and the massive expansion of CCDs stores posed various challenges for VGS, including thin margins. To manage the capital expenditures and the operating costs, VGS raised debt from private equity players... |
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| Many analysts and the auditors were not convinced with the financial reporting structure of CDEL, as they were unable to take a decision based on the information provided in the annual reports. Since 2017-18, the company had been in the process of streamlining its financial reporting processes... |
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| The news that VGS had been reported missing by his driver near the Netravati River made headlines in the media and business circles on the evening of July 29, 2019. A massive hunt was mounted for the coffee baron and speculation of various kinds began doing the rounds in media and business circles... |
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| Amid the speculations doing the rounds in media, political, and business circles, the management of CDEL came forward to state the debt position of the company. As per the information provided by it, as on August 17, 2019, the total debt outstanding with CDEL was Rs. 49.70 billion. .. |
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Exhibit I: Various Category of Products and Services offered at CCD Outlets
Exhibit II:
Pricing of Key Coffee Products offered by CCD and its Competitors
Exhibit III: Market Share of CCD in 2015
Exhibit IV:
No. of Stores of CCD – Competitive Position
Exhibit V: Percentage of Private Equity Holdings in CDEL
Exhibit VI: Shareholding Pattern of CDEL
Exhibit VII: Mindtree Shareholding Pattern by VGS and his Associate Companies
Exhibit VIII: Shareholding Pattern of VGS Promoted Entities in CDEL and the Percentage of Shares Pledged
Exhibit IX: Letter Written by VGS
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