V.G. Siddhartha, Café Coffee Day's fortunes and the story behind it all

Do Siddhartha’s assets far outweigh his total debt?

V. G. Siddhartha(R) , Chairman, Coffee Day Enterprises Ltd along with Venu Madhav, CEO, Coffee Day Enterprises Ltd

V. G. Siddhartha(R) , Chairman, Coffee Day Enterprises Ltd along with Venu Madhav, CEO, Coffee Day Enterprises Ltd   | Photo Credit: PAUL NORONHA

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‘Cafe business brand can be valued at ₹7,000-8,000 crore’

Coffee baron V.G. Siddartha has meticulously listed out all his assets before he went missing mysteriously on Monday evening.

By going through the long list of properties owned by the company, one would really wonder what is his liability against all these valuable assets.

As per a detailed letter Siddhartha left behind, his realty venture Tanglin has 90 acres of land on Mysore Road, with a 4.5 million sqft built up area and potential ₹ 250 crore rental expected in the next 12 months. The company also has 21 acres of land in Mangaluru. Both Bengaluru and Mangaluru properties together value ₹3,600 crore and ₹4,000 crore respectively.

Again, his cafe chain, Coffee Day Global Ltd has 1,600 stores, 54,000 vending machines and over 500 express stores. He is expecting a revenue of ₹2,200 crore in March 2019 from cafe business alone.

"The brand is valued at 3-4 times of its revenue with a potential of ₹7,000-8,000 crore range,’’ he writes.

"CCD can add 45,000 vending machines easily in the next 3.5 years, this is the potential and power of the brand,’’ he further writes.

On the company’s exports, he says, Curing Works & Roasting factory in Chikkamagaluru with a land parcel of around 30 acres should be in the ₹150 to 200 crore value range. An additional 30 acre facility in Hassan should be worth ₹150 crore. Coffee Day exports around 20,000 tonness of beans.

"We are already talking with international players like Coke & lTC for partnership in the business. CCD has got a good procurement network to get 25,000-30,000 tonnes of coffee in local market. New roasting facility which has just started can roast around 15,000 tonnes of coffee and this can act as a great backend business in procuring & roasting with lot of international brands instead of exporting green coffee,’’ the coffee king writes in his letter before he went missing.

V.G. Siddhartha's and Café Coffee Day's journey through the years

Coming to Plantations that alone worth at least over ₹2,000 crore, he says, associated & family owned, the company has over 12,000 acres of coffee under cultivation. Almost 70% area has young plants which is producing 2000 tonnes of Arabica and 1200 tonnes of Robusta. Looking at the plant material it will produce 6-6,500 tonnes of coffee in the next 2-3 years with little improvement in the irrigation system.

In addition, Mr.Sidhartha’s list continues, the company has over nine lakh matured Silver Oak trees and other valuable timber assets in the plantation worth over ₹ 2,300 crore.

On the loss making logistics ventrue Sical, he writes, ``In Sical our holding is around 60%, all the debt in Sical are project debts which I feel can be taken care of by the company directly and Sical equity value of our holding should get around ₹1,000 crore.

The group’s wealth management firm Way2Wealth, generates ₹5 crore EBIDTA every year, this business with a cash on hand should get value of around ₹400 crore as a running business.

Siddhartha’s hospitality brand Serai has three properties located in Chikkamagaluru, Kabini and Bandipur with some stake in Barefoot Resorts at Andamans along with a land parcel there which should work out ₹300 crore, as per his letter.

As per company annual report, its group debt as of March 31, 2019 was ₹5,049 crore. The company is yet to announce its Q1 revenue numbers for fiscal 2020.

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Printable version | Dec 12, 2019 7:10:34 PM | https://www.thehindu.com/business/Industry/do-siddharthas-assets-far-outweigh-his-total-debt/article28763800.ece

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