Coffee Day Enterprises’ shares surged as much as 20% to hit the upper circuit limit on Wednesday after the company announced that the National Company Law Appellate Tribunal (NCLAT) passed an order terminating Corporate Insolvency Resolution Process (CIRP) proceedings against its subsidiary Coffee Day Global Ltd (CDGL). 

Earlier on July 20, the Bengaluru bench of the National Company Law Tribunal (NCLT) passed an order regarding a petition brought by IndusInd Bank, a financial creditor of CDGL, seeking payment of Rs 94 crore in unpaid debts related to a Rs 115 crore short-term loan from February 2019.

Attorneys of CDGL and its financial creditor, IndusInd Bank, informed the Chennai bench of the NCLAT that they reached a settlement and have withdrawn insolvency litigations and requested authorisation to end the insolvency proceedings. The NCLAT took their submissions on record and passed an order terminating CIRP Proceedings against CDGL and granting stay against the NCLT order.

After the news, shares of Coffee Day were locked in at a 20% upper circuit at Rs 51.30, against the previous closing price of Rs 42.75 on the National Stock Exchange (NSE). The stock has seen a sharp rebound of more than 55% in the last six months. 

The Bombay Stock Exchange (BSE) and NSE have put the shares of Coffee Day under the short-term Additional Surveillance Measure (ASM) framework to caution investors about high volatility in share prices.