We all love coffee right, from office meetings to conferences, everybody requires coffee to heal. In India, almost 90% of coffee plantation happens in karnataka, Tamil Nadu and Kerala. It is a market of high volatile nature and production takes time and care. V. G Siddhartha, the founder of CCD, received property worth 400 acres of coffee farm from his grandfather, but he was never interested, and he tried various other professions, but finally he went back to his traditional business. Initially, he started his business with coffee powder, which was profitable. Eventually, he wanted to start a coffee shop but many of his well-wishers told him not to open it. As coffee was already available for just 10 rupees.
He visited Singapore for a meeting, where he observed all the coffee shops and their business, which inspired him to start his own business. By all against his well-wishers, he started the Café Coffee Day business. Within a few days, the business saw massive growth. He established 1400 outlets with 28,777 coffee vendor machines. He followed his heart and expanded the business 10x more than he received from his parents.
The Downfall
As the CCD business was profitable and growth. Siddhartha took another few risks and wanted to expand the business even more. He entered into the real estate and financial advisory business, he launched Global Tech Park and called many entrepreneurs and corporate giants for business growth.
* Launched Sarai Hotels and resorts
* As he had a huge amount of land which was filled with trees, he decided to start a furniture brand.
* He even became an investor and bought many IPOs of big brands like Infosys.
* He started an IT consulting firm called Mind Tree.
The initiatives were wonderful and visionary, but he did all the work alone without depending much on others. Eventually, the leadership crisis in the companies started and everything got messed up. Eventually involved with politicians, a few allegations have created big income tax rides from governments.
He risked taking so many loans which created huge burdens on his entire company. The ambition to expand quickly with extra loans was a major setback for CCD, as the profit margin dropped compared to before and most of the money was invested. He was surrounded by a lot of pressure from repayment debts, politics, income tax rides, investor pressure, already sold the companies' shares. This burden created pressure to his entire business empire and attempted suicide in 2019.
The shares were around 360 rupees, which eventually reached to 36 rupees. A debt worth 6000 crore has successfully made business fall. After the loss, V. G Siddhartha’s wife took over the company and she successfully recovered from the loss by selling and downsizing the assets but still not yet completely out of danger from debts.
