Rating Rationale Coffee Day Enterprises Ltd (Formerly Coffee Day Resorts Pvt. Ltd.) 27 Apr 2018 Brickwork Ratings reaffirms ratings for the various NonConvertible Debenture Issues aggregating to. 810.00 Crores of Coffee Day Enterprises Ltd (Formerly Coffee Day Resorts Pvt. Ltd.) Particulars Instrument Issue Date Previous Amount ( Crores) Present Amount ( Crores) Coupon (P.A.) Maturity Date ISIN Particulars Rating History (Apr ) Reaffirmed Rating* 4May 60.00 60.00 11% 4May2019 INE335K07232 13Apr 90.00 90.00 11% 13Apr2019 5Apr 85.00 85.00 10.99< >11.01% 5Apr2019 INE335K07216 upto 19 months 6 days) 30Mar 14Mar 105.00 105.00 8% with redemption premium 5Nov2018 100.00 100.00 11% 13Mar2019 INE335K07208 INE335K07190 (Pronounced as BWR Double A Minus) (Structured Obligation) (Outlook: Stable) (Pronounced as BWR Double A Minus) (Structured Obligation) (Outlook: Stable) upto 3 years) 27Apr 2015 60.00 60.00 14.5% 27Apr2018 INE335K07141 12May 2015 60.00 60.00 INE335K07158 upto 60 Months and 3 days) 14Mar2 014 6.5% with redemption premium 250.00 250.00 17Mar2019 INE335KO7117 *Please refer to BWR website www.brickworkratings.com/ for definition of the ratings 1 27 Apr 2018
Rating Reaffirmed Rationale/Description of Key Rating Drivers/Rating sensitivities: BWR has essentially relied upon the audited financial results of Coffee Day Enterprises Ltd ( CDEL or the Company ) upto FY17, unaudited figures for 9MFY18, terms of the above issues shared with us, and information/clarification provided by the issuer. The rating reaffirmation factors the structure of NCDs, credit profile of CDEL and operating performance, the established brand of Café Coffee Day group, its professional management team, net worth of promoter i.e. Mr. V G Siddhartha, who has also extended his personal guarantee for these NCD issues, and the underlying security coverage in the form of equity shares of listed/unlisted companies for the NCD issues. However, the rating is constrained by illiquid nature of the unlisted securities offerred as securities for the NCDs, CDEL s dependence on dividend and consultancy fee income being a holding Company of the Group, refinance risk or funding support from promoters and increasing competition in the Coffee Business. Analytical Approach CDEL has issued various Structured Redeemable NCD aggregating to 810 Crs. All these issues are secured by way of overall security cover ranging from 2.5 times to 3 times in the form of pledge of shares. Out of which listed equity shares of Mindtree Ltd aggregating to 1.0 times is common in all the issues and pledge of unlisted equity share of Coffee Day Global Limited ( CDGL ) for the remaining cover. Additionally NCDs are secured by the personal guarantee of the promoter i.e. Mr. V G Siddhartha. Other covenants are standard terms that are common for issues of this nature. Mindtree Ltd. s stock is currently trading in the range of 900 1000, with 52 week low of 439.05 and 52 week high of 1027.70 during the past one year. Rating Outlook: Stable BWR believes the Coffee Day Enterprises Ltd (Formerly Coffee Day Resorts Pvt. Ltd.) business risk profile will be maintained over the medium term. The Stable outlook indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive' in case the revenues and profit show sustained improvement. The rating outlook may be revised to 'Negative' if the revenues go down and profit margins show lower than expected figures. 2 27 Apr 2018
About the Company CDEL is the listed holding company for various companies of the Coffee Day group, promoted by Mr. V G Siddhartha & his family. The key companies of the group are Coffee Day Global Ltd(Coffee Retail & Exports), Sical Logistics Ltd (Logistics), Tanglin Developments Ltd(Tech Park & SEZ), Way2Wealth(Financial Services), Coffee Day Hotels & Resorts Ltd(Hospitality) and Coffee Day Trading Ltd(Investments). The consolidated financials of CDEL includes financial figures from all these key companies. As of Dec, promoter holding is around 53.93% in CDEL. Further, Mr. V G Siddhartha, his family and companies own about 12,000 acres of coffee estates and also have a network of about 11,000 small growers providing support to Coffee Day Global Ltd; the Group has a rich and abundant source of coffee. Coffee Day Global Ltd. (CDGL) is a flagship operating company of CDEL, and is India s largest vertically integrated coffee business. Its business ranges from retail sales of coffee under its brand Café Coffee Day in different formats such as café outlets, kiosks, vending machines to the export of coffee beans. The café outlets (~1682) are wide spread with presence in 241 cities/towns in India and some outside India. Company Financial Performance Being a holding company, CDEL has investments in CDGL, Global Technology Ventures Ltd, and Mindtree Ltd along with other group companies. On a consolidated basis, for FY17, CDEL has reported total income from operations of 3119.64 Crs with PAT of 81.56 Crs as against income from operations of 2780.52 Crs and Net loss of 9.60 Crs in FY16. As per unaudited 9MFY18 financials, CDEL s total income from operations stood at 2712.2 Crs with PAT of 117.5 Crs when compared to total income of 2275.4 crs and PAT of 53.8 Crs for 9MFY17. Coffee & Related business, Logistics, Financial Services, Leasing of commercial office space and Hospitality contributed around 52%, 28%, 14%, 4% and 1% respectively to the total operating income. 3 27 Apr 2018
Rating History for the last three years Sl. No. Instrument Current Rating Rating History 1 Proposed NCD Type Amount (Rs Crs) Long Term 60 2 NCD Long Term 90 3 NCD Long Term 85 4 NCD Long Term 105 5 NCD Long Term 100 6 NCD Long Term 120 7 NCD Long Term 250 Rating (Apr 2018) 8 NCD Long Term 80 9 NCD Long Term 90 Apr 2016 2015 4 27 Apr 2018
10 NCD Long Term 95 11 PPMLD Long Term 85 BWR PPMLD AA 12 NCD Long Term 65 13 NCD Long Term 100 14 NCD Long Term 75 15 Secured Loan Facility BWR PPMLD AA Long Term 25 16 NCD Long Term 60 BWR PPMLD A+ Hyperlink/Reference to applicable Criteria General Criteria Approach to Financial Ratios For any other criteria obtain hyperlinks from website 5 27 Apr 2018
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