From coffee king to crisis: the rise and fall of Cafe Coffee Day

Café Coffee Day was once the default hangout spot for students, young professionals, and families across Indian cities. A first date, a college group project, or a quiet solo evening with a cappuccino often began at a CCD table. That is why the sudden news of its founder VG Siddhartha going missing in July 2019 felt personal to many people who had grown up with the brand. Behind the warm lighting and familiar green logo, however, the business was carrying a level of financial stress that even a popular brand could not survive.

The making of a coffee baron

VG Siddhartha was born in 1959 into a prosperous coffee-growing family in Karnataka’s Malnad region. Coffee estates and plantation life were not distant ideas for him; they were part of his childhood and family legacy. As a college student in Mangaluru, he arrived to class by car or bike, the kind of student others easily noticed. At the same time, he was drawn towards left-leaning ideas after watching plantation workers struggle with poverty, while still believing that building businesses and making money could create real change.

Instead of jumping straight into the family business, Siddhartha moved to Bengaluru and started working as a stockbroker. He built his own firm, Sivan Securities, and learned how markets behave when money is cheap, when greed takes over, and when panic sets in. During the Harshad Mehta boom period, he made money using classic arbitrage, buying shares where they were cheaper and selling where the price was higher. One of his smartest bets was buying 60,000 shares of Infosys during its early days, a decision that eventually gave him the capital and confidence to dream much bigger.

Liberalisation, ABCTL and the export boom

In the early 1990s, India’s coffee trade was tightly controlled by the Coffee Board. Estate owners were forced to sell their beans to the Board, which then exported large quantities to the Soviet Union under government arrangements. Growers received small advances quickly, but the final payment often arrived after two or three years, choking cash flow on the ground. Many planters from Karnataka, including Siddhartha’s circle, pushed for change in Delhi, and liberalisation slowly opened the door for direct sales.

Growers were first allowed to sell a portion of their produce directly, and that share later increased. This shift transformed the business overnight. Prices improved and farmers could reinvest instead of waiting endlessly for dues. In 1993, sensing the opportunity, Siddhartha founded Amalgamated Bean Coffee Trading Company (ABCTL). The company bought coffee from smaller growers and sold it directly in international markets. While local sellers were used to earning around Rs 24–25 per kg, ABCTL sometimes fetched more than double that, and during a supply crunch in Brazil, prices shot up as high as Rs 180 per kg. ABCTL became so influential in Chikmagaluru that other traders started looking at its rates before setting their own.

From beans to cafés: the birth of CCD

Even while ABCTL was thriving, Siddhartha knew the export market was vulnerable to global shocks. A bad year in another country or a currency issue could hit revenues without warning. To reduce this risk, he wanted a direct-to-consumer brand that turned his coffee beans into a lifestyle experience. His friends laughed when he floated the idea of selling a cup of coffee in Bengaluru for Rs 25, when a strong filter coffee at a local joint cost just Rs 5. But he believed people were willing to pay more if they got atmosphere, time, and a certain feeling in return.

Inspired by a visit to Singapore in 1996, where he saw people working on computers and chatting in a cozy space, he imagined something similar for Indian cities. On 11 July 1996, he opened the first Café Coffee Day outlet on Bengaluru’s Brigade Road. It offered internet access, Italian-style coffee drinks like cappuccino, espresso, and latte, and a relaxed space to sit for hours. For a generation discovering the internet and urban independence at the same time, CCD felt different from the noisy, quick-turnover Darshini culture. The concept clicked immediately, and new outlets soon appeared in Bengaluru, Chennai, and Mysuru.

Professionalising a family-run venture

In the early days, CCD still behaved like an extended family enterprise. Many employees were relatives, friends, or young people Siddhartha knew from his hometown who needed a job in the city. That kind of loyalty-heavy structure helped build trust, but it did not guarantee discipline in operations or clear financial targets. By the early 2000s, despite a growing brand presence, the business numbers were worrying.

This is when corporate veteran Naresh Malhotra entered as CEO in 2001. He had previously worked with Vijay Mallya on building Berger Paints and later helped set up KPMG’s operations. When Malhotra studied CCD’s finances, he reached a painful conclusion: several cafés were losing money, and the cost structure was too heavy. Instead of announcing expansion plans, he recommended shutting 10 out of 18 outlets and reducing staff. Siddhartha was taken aback at first, but after hearing the logic, he agreed. Over the next six years, Malhotra introduced systems and processes that turned CCD into a more disciplined organisation, laying the base for later expansion.

Aggressive growth and the debt trap

Once the business stabilised, CCD entered a rapid scaling phase. By 2004, there were about 150 cafés; by 2008, that number had grown to more than 500 across major cities like Delhi and Mumbai. New competitors such as Barista, Costa Coffee, and Coffee Bean & Tea Leaf started fighting for the same urban audience. Instead of focusing purely on making CCD outlets efficient and profitable, the broader group under Café Day Enterprises Limited moved into multiple businesses, including real estate and tech parks.

Expansion on so many fronts came at a cost. Long-term borrowings stood at around Rs 1,600 crore in the 2012 financial year and shot up to about Rs 3,500 crore within three years. Some smaller ventures inside the group struggled to make money, but they still received funding from the main company. Money shifted from one pocket to another through internal loans, creating a maze that was hard even for analysts to fully decode. Siddhartha hoped these bets would eventually mature into steady assets, but in the meantime the interest burden and complexity kept rising.

The IPO, tax raids and a changing banking climate

Originally, the plan was to take only the café business public. But because many other group companies needed help, Siddhartha finally chose to list the entire holding company, Café Day Enterprises Limited. The aim was to raise roughly Rs 1,000 crore, more than half of which was earmarked for loan repayment. Analysts openly questioned why someone should invest in a structure that looked complex, carried high debt, and offered modest returns. When the IPO finally launched, the stock listed below its issue price, a clear sign that the market’s enthusiasm was weak.

Borrowing did not stop after the IPO. The group still needed fresh money to support real estate projects and keep new ventures afloat. Shares of the company were pledged as collateral for loans, which meant that if prices fell or payments were delayed, lenders could technically seize control. Around this time, India’s banking rules also tightened. RBI Governor Raghuram Rajan’s asset quality review made it harder for banks to roll over bad loans by simply giving new money to pay old dues. For someone like Siddhartha, who often relied on new credit to buy time, the environment turned much tougher.

In September 2017, income tax raids at Café Coffee Day offices and at Siddhartha’s residence added another layer of strain. Allegations of irregularities hurt sentiment, and the stock fell sharply. On the surface, customers still walked into CCD outlets to drink coffee, chat, and work on laptops. Internally, though, the pressure from lenders, regulators, and the public markets was piling up.

The IL&FS shock and shrinking options

The collapse of IL&FS in 2018 was a turning point for India’s financial sector. IL&FS had borrowed heavily from banks and invested in large infrastructure projects, but many of those loans soured. When its credit rating plunged to default levels, mutual funds holding its debt faced redemptions, and investors started treating anything that looked similar with suspicion. The fear spread quickly to non-banking finance companies and corporates that depended on constant refinancing.

Siddhartha’s group had been rolling over loans for years, taking new debt to pay old dues, a practice often described as evergreening. In 2018, he reportedly borrowed Rs 3.5 billion to repay loans of about Rs 2.8 billion. His personal charm and relationships with bankers had helped him secure funding in the past. There are stories of him hosting a bank executive’s wedding at his Serai resort to nurture goodwill. After the IL&FS crisis, though, bankers became far more cautious. For someone whose financial structure depended on goodwill and constant access to credit, the tap began to dry up.

Selling Mindtree and failed asset sales

One of Siddhartha’s biggest long-term investments was a stake in IT company Mindtree. He had backed the founders early, even giving them office space rent-free for months so they could get started. His roughly 21 percent stake, bought years earlier for about Rs 45 crore, had grown to a valuation of around Rs 3,000 crore. This stake had the potential to act as his safety net.

For six to seven months, he tried to sell this stake to different private equity buyers. Some were willing to pay close to Rs 1,000 per share, which would have brought in Rs 3,000–3,400 crore. But negotiations dragged on. Sometimes Mindtree’s management did not agree, sometimes the final price or terms did not work out. Meanwhile, his lenders were not willing to wait indefinitely. In March 2019, L&T finally acquired his stake for about Rs 3,200 crore. Much of this money went straight into paying down loans instead of giving him a fresh start. He was also open to selling other assets, including tech parks and the profitable vending machine business. Coca-Cola reportedly showed interest in the vending arm but felt the asked valuation of Rs 8,000–10,000 crore was too high. With total debt at the holding company level above Rs 7,000 crore, every delay reduced his room to manoeuvre.

The night at the bridge and the note

On 29 July 2019, Siddhartha left his Bengaluru home in a Toyota Innova, driven by a driver who was filling in because the usual one was on leave. He told his family he was going to visit coffee estates near Sakleshpur or Mudigere. Midway, he changed the plan and asked the driver to head towards Mangaluru instead. At the Netravati River bridge, he asked the driver to stop, stepped out, and said he would walk across the bridge while the car moved ahead. Instead of heading in the same direction, he walked the other way until he was out of sight.

When he did not return and did not answer calls, the driver raised the alarm and a missing complaint was filed the next day. News broke that the founder of India’s largest café chain had disappeared. Soon, a note surfaced from his office, written two days earlier. In it, Siddhartha wrote that he had failed as an entrepreneur, that he had tried his best, and that he felt crushed by pressure from lenders and tax authorities. He mentioned that the company’s assets were greater than its liabilities, but that he could not see a way out. On 31 July, his body was recovered from the river, closing the search but leaving many questions about how a celebrated founder had reached this point.

Aftermath: Malvika’s turnaround and a smaller CCD

After Siddhartha’s death, his wife Malvika Krishna stepped in to lead the group at a moment when most people would have walked away. She inherited a business with roughly Rs 10,000 crore in debt and a portfolio of assets that was already heavily pledged to banks. Instead of trying to preserve the old scale at any cost, the new leadership focused on survival. They started selling what they could, including the Global Village tech park, which reportedly fetched around Rs 2,700 crore.

On the café side, many locations were shut down, especially the ones that were consistently losing money or had poor footfall. CCD’s network shrank dramatically from around 1,700 cafés in 2019 to roughly 450 a few years later. The goal was simple: protect whatever was still healthy, close what was draining cash, and keep paying down lenders. By 2025, the group’s debt was down to a few hundred crores, a fraction of the mountain it once carried. CCD no longer dominates Indian high streets the way it did in its peak years, but the brand has not disappeared either. It lives on in a leaner form, shaped by hard lessons about growth, debt, and the limits of optimism.

What CCD’s journey says about growth and risk

It is easy to remember Café Coffee Day only as the place where friendships and careers started. The full story is more complicated. Siddhartha was both a sharp operator and an eternal optimist. He spotted opportunities early, from coffee exports to urban cafés, and backed founders long before Indian startup investing became fashionable. At the same time, he kept betting that one more loan, one more asset sale, or one more expansion plan would eventually even out.

For anyone building a business, CCD’s arc is a reminder that scale alone does not protect you when your capital structure is stretched and your bets are scattered. It also shows how quickly market sentiment and banking rules can change the rules of the game for entrepreneurs who rely heavily on debt. The cafés that remain still host conversations over coffee, but the story behind that cup now carries a quiet warning about knowing when to push ahead and when to stop.