Investors will soon be offered further equity (an FPO of 10 per cent) in the Indian Government majority-owned Coal India Limited (CIL).
This FPO will likely position investing in Coal India as an “opportunity” for investors in a robust emerging market, on the basis of widely held assumptions regarding India’s continued reliance on thermal coal for power generation; and it having among the largest, lowest priced coal resources in the world.
However, new financial analysis based on information obtained by Greenpeace via the Right to Information Act suggests that the assumption that Indian coal will continue to be plentiful and cheap no longer holds true.
This briefing outlines the key findings from a recent analysis of Coal India’s financial prospects. We suggest questions for investors to consider in assessing the risks and opportunities from investing in Coal India.