Shares of Coffee Day Enterprises, the company operating Café Coffee Day outlets, jumped 20 percent and hit the upper circuit on May 29.
The sharp rise came as Karnataka's Deputy Chief Minister DK Shivakumar is set to become the next chief minister of the state.
Market investors reacted positively to the political developments, leading to heavy buying in the stock during trading hours.
The stock opened higher by 12.5 percent at Rs 32.62 apiece compared to its previous close of Rs 28.99 apiece.
It further surged to Rs 34.78 apiece to rise 20 percent from the previous close and hit upper circuit.
Shivakumar Has Family Ties With CCD Founder
Investor interest in Coffee Day Enterprises increased because of Shivakumar’s family connection with the Café Coffee Day founder’s family.
Shivakumar’s eldest daughter, Aisshwarya, is married to Amartya Hegde, son of late Café Coffee Day founder VG Siddhartha.
The family relationship triggered speculation among investors that a leadership change in Karnataka could positively influence market sentiment around the company.
However, the company itself has not made any official statement linking the stock movement to political developments.
Stock Sees Renewed Buying Interest
Coffee Day Enterprises shares have remained volatile in recent years because of debt concerns and business restructuring efforts after the death of founder VG Siddhartha in 2019.
The company has been working on reducing debt and stabilising operations.
Friday’s rally reflected renewed investor optimism and strong speculative buying activity following the political news from Karnataka.
Analysts said traders were closely tracking both political developments and the company’s future business recovery plans.
