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Coal India is the world¶s largest producer of Coal, thanks to being born in Coal Country, India,
and thanks to the head-start it enjoyed as the sole PSU in this sector. Despite being India¶s
largest employer, its operating costs are much lower than almost all coal majors, including those
in China. At the same time, it services the second-largest coal demand in this whole world,
India¶s power sector. Together, this has resulted in a robust business model, seldom seen
elsewhere in any sector or country.

ALSO READ: Coal India IPO - Assessing Coal India's Management Expertise
ALSO READ: Coal India IPO Open - Are There Any Unique Prospects for Investors?

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If Coal India created history, when international banking giants vied with each other to
underwrite its IPO for next to nothing, it is again going to surprise by way of support from
international institutional investors. The idea of having 30% reserved for anchor investors is
already being scrapped, as the international road-shows progress, and the underwriting
institutions are themselves busy readying funds and formalities to subscribe to the issue. The IPO
is supported by Wall Street majors like Citi, Deutsche Bank, BofA - Merrill Lynch, & Morgan
Stanley, as well as Dalal Street biggies like Enam & Kotak.

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Technically, Coal India is not a monopoly. Many private sector players today have captive coal
fields for their own use. But Coal India and its myriad subsidiaries virtually control the bulk of
this business, if not for anything else, for the simple reason that nobody else is equipped to cater
to the huge Indian demand. For many many years, if not decades, Coal India is not expected to
have any serious competition.

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Coal India has garnered its first IPO rating, a 5/5 from CRISIL, which goes even one step above
the µabove average fundamentals¶, which in itself is rare in this country. In fact, the only
challenges CRISIL found in Coal India¶s strategy are efficient use of their cash reserves and how
the main promoter (who will hold 90% post-issue) will act by way of enacting new coal
regulations. Those are the kind of drawbacks many PSUs would love to have! More solid ratings
from more assessors are expected for this IPO in the coming days.

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If Coal India IPO was just India¶s biggest, many would have been happy. Because, all interested
retail investors would be able to hold a pie of this. But Coal India is also reportedly world¶s third
largest IPO. That means all interested investors will be comfortably accommodated - FIIs, DIIs,
retail investors, pension funds, everyone.

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Being a public sector company, nobody expects Coal India to be exorbitantly priced like private
sector IPOs, despite being in the high-buzz energy sector. Whatever heavy pricing Government
had resorted to earlier is likely to be missing as such IPOs like NHPC & SJVN had failed to
appreciate much. More likely for Coal India will be how Engineers India FPO was finally priced,
or even better. On reasonable P/E and P/BV, both the Government and potential investors are all
set to gain.

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Chairman Partha S Bhattacharyya understands both the science and commerce of coal. A physics
postgraduate and an ICWA Fellow, Bhattacharyya has clearly applied superb strategy over the
years leading to this IPO, to convert this once loss-making complex of subsidiaries into a strong
network of coal mining operations. His secrets include a concern for the labour force which can
be seen from the largest ESOP, his concern for making Coal India a highly-profitable
organisation, and his concern for the environment.

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Coal India¶s story so far is Indian. But this is going to change soon as Coal India starts to get
results from the next-gen washing process that will enable Coal India to deliver international
quality coal. Combine this with Coal India¶s expertise in delivering the most competitive pricing,
and you see the international story starting to appear in the horizon. Talks are already on to take
stakes in international mines.

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There are chances that Coal India will be one of those issues fit for the invest n¶ forget
philosophy, much like Reliance Industries or Infosys. The demand story and the growth story of
Coal India is akin to the best in Indian industry, with the demand insatiable and the growth
relentless. Such factors make Coal India one of those rare IPOs that can be massive wealth
creators over two, five, ten, or fifteen years down the lane.

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If you are looking for short-term gains too, Coal India comes across as a strong case. If not for
anything else, the above nine factors will ensure that Coal India will set new records in over-
subscription, paving the way for significant listing gains. But, more seriously speaking, Coal
India¶s attractive valuation will leave enough money on the table for many weeks, months, and
quarters to come, and make it a heavily traded scrip fit for Nifty and Sensex.