COAL INDIA LIMITED

BY – GROUP 5
INTRODUCTION
A Nav Ratna company
Single largest coal producing in the world
It contributes about 85% of the total coal production in
India.
Coal India Limited (CIL) is an Indian state-
owned coal company headquartered in Kolkata.
Revenue exceeding Rs 45,797 Cr or $10.3 billion U.S.
(FY2008-09)
8 subsidiary companies
Bharat Coking Coal Limited(Dhanbad, Jharkhand)
Central Coalfields Limited (Ranchi)
Western Coalfields Limited (nagpur)
Eastern Coalfields Limited (Asansol, West Bengal)
Central Mine Planning and Design Institute
Limited(Ranchi)
Indian Institute of Coal Management (Ranchi)
Mahanadi Coalfields Limited (Sambalpur)
South Eastern Coalfields Limited (Bilaspur)
Northern Coalfields Limited, Singrauli
Operates 473 mines spread over in eight states out of
which 283 are underground, 155 opencast and 35
mixed mines.
Mainly produces coking and non-coking coal. 74% of
the total coal production of CIL caters to 72 thermal
power stations, out 75 of the country generating
64,285 MW.
Coal India IPO subscription
India’s largest and the world’s third largest IPO
The company aimed to raise more than Rs 15,000
crore through the IPO
Fixed a price band at Rs 225-245 a share and is
offering more than 63 crore shares via IPO.
 Investment Rationale

1] Size and reserve advantage- The largest coal

producer and reserve holder in the world
2] Demand advantage
- Well positioned to capitalize on the high demand
for coal in India
- high demand for coal in the thermal power sector
and the iron and steel
- projected to grow at a CAGR of 11.3% from 508
million tons in FY09 to approximately 868 million
tons in FY14
3] Cost advantage
- Cost efficient operations
- enjoys significant cost benefits due to its production
techniques.
- Continuous improvement in labour productivity
leading to healthy profitability of operations.
4] Scope for increase in average realization
- due to a higher proportion of sales through the e-
auction route
- secondly due to the investment in coal washeries as
washed coal commands higher realization and margin.
5] Healthy balance sheet
- debt: equity ratio at 0.08x as on FY10
- Its cash position stands at Rs 380 billion taking the
cash/share at Rs 60
- Its operating cash flows are attractive at Rs 133
billion.
6] Strong capabilities for exploration, mine
planning, research and development
- The wholly-owned Subsidiary CMPDIL provides
technical and consultancy services for our operations

- CMPDIL has significant knowledge of geological

and geo-mining conditions in India which enables us
to implement effective mine development and mine
planning activities.
 Sales & Profit Analysis
Particulars 2010 2009 2008
NET SALES
PAT(Rs Million) 98,294 40,628 42,850
EBITDA(%) 27.6 15.7 19.5
  
Risks & Concerns

1) Company’s operations are subject to various

risks inherent to mining activities and they do not
maintain insurance coverage in accordance with
applicable industry standard.
2] The regulatory framework in India is evolving,
and regulatory changes as and when introduced by
the GOI could have a material adverse effect on the
business, financial condition and results of
operations
3] Company’s operations are sensitive to seasonal
changes:
- high temperatures during summer months and rain
during monsoon
- company may continue to incur operating expenses,
but revenues from operations may be delayed or
reduced.
4) Contingent liabilities has not been accounted
- primarily relating to claims not acknowledged as
debt, disputed tax liabilities, guarantees given by
Company and letter of credit
- if such contingent liabilities materialize, that may
adversely affect their financial condition
5) Any changes in interest rates could affect results
of operations and financial condition
- As of 30th June, 2010, 37.7% of total indebtedness
were at floating rates of interest
- If the interest rates for the existing or future
borrowings increase significantly, cost of funds will
increase.
6) Failure to protect our intellectual property rights
may adversely affect the business
- Company’s trademark and logo are not registered
- also do not have registered patents for any of the
technological advances made in research and
development activities.
RETAIL BONDS CASE
ANALYSIS
 Parameters considered while investing in
Bonds:

First actual tax saving,

second the returns from the investment considering the
lock in period,
third would be the opportunity cost which means what
if the same money invested in some other type of
investment and
the last is the effect of inflation on the returns what we
receive at maturity.
STATE BANK OF INDIA
Its origin goes back to the first decade of the
nineteenth century with the establishment of the bank
of Calcutta in Calcutta on 2nd June 1806.
Re-designed as the Bank of Bengal (in 2nd Jan,1809)
Bank of Bombay (15 april 1840) and the bank of
Madras (1st July 1843) followed the bank of Bengal
amalgamation of these three banks as the imperial
bank of India on 27th Jan 1921
Now SBI is the country’s premier financial institution
SBI Retail Bond
raise Rs 1,000 crore by issuing long-term bonds of 10
and 15 years duration to retail investors.
 first time that a bank is issuing Tier II bonds to retail
investors
the bonds will be issued in two series
 Series I will be of 10 years duration and carry a
coupon rate of 9.25 per cent
Series II will be of 15 years duration and carry a
coupon rate of 9.50 per cent. Interest is payable
annually.
Features of SBI Retail Bond:
1] Interest rate on SBI Bonds
2] Demat account is compulsory for investing in
SBI Bonds
3] Credit Rating
4] Tax implications of the SBI Retail Bond
5] SBI Bonds to be listed on NSE
 6] Minimum application size on the SBI bond
7] Issue of the Bond
 8] SBI Retail Bonds comparison with fixed deposits
Issue Summary
 IDFC
a leading knowledge-driven financial services company
in India
plays a central role in advancing infrastructure
development in the country
is a one-stop-shop for all products and services across
the infrastructure value chain
sponsored by the Government of India as a key
institution to facilitate infrastructure development in the
country
 focus areas for IDFC continue to be the Energy,
Telecom, Industrial & Commercial Transportation,
Healthcare, Education and urban Infrastructure sector
IDFC Infrastructure Bonds
is aiming to raise Rs. 3400 crores via this maiden issue
of such bonds
no minimum issue size specified
This is a 10 year maturity bond that comes with the
option of buyback after 5 years
allow an investor to reduce Rs.20,000  from your
taxable income over and above the Rs. 100,000 limit
increases the effective yield because along with the
interest investor earns on these infrastructure bonds
and save on tax as well.
Features of the IDFC Infrastructure
Bond
1] Interest Rate of 7.5% or 8.0%
2] Credit Rating
3] Listing on the stock exchange
4] Minimum Investment in the IDFC Long Term
Infrastructure Bond
5] Issue of the bonds
 6] IDFC bonds comparison with fixed deposits
Issue Summary
Investments to the individuals will be as
follows:
Ajay – age 30 yrs – annual income of 12 lacs
He’ll invest in IDFC infra bonds
Risk appetite is more
Get Tax benefits
And can pledge it for loan

Rajesh – age 58 years- annual income of 18 lacs

He’ll invest in SBI Retails bonds
Risk averse person
Concerned about getting good returns with minimal risk
involved in it
THANK YOU