Information about Coal India:

The Government of India controls coal India. It is a Maharatna company and the world's largest producer of coal. About 82% of the fuel produced in India comes from Coal India. In 2010, only about ten percent of the company's shares were initially offered to the public for sale. The price of the shares was inclined by 40% more than the actual IPO price. In early 2015, the company has offered a further 10% of the shares for sale to the public.

History of Coal India:

Initially, all coal mining in India was privatized. The GoI then established a company that was known as the NCDC to have better control over the resource to ensure rapid industrialization. Then, slowly, the Government of India began to nationalize coal mines in the country. At one point, all coking coal mines were controlled by Bharat Coking Coal Limited (BCCL) and all non-coking coal mines were regulated by the Coal Mines Authority. To combine all coal sources for better coal resource management, the Government of India has created a new company. In 1975, Coal India Limited (CIL) was established.

Management of the Company:

The Chairman and MD, of the company, is Mr. Gopal Singh. The company has four Directors—Mr. S N Prasad for Marketing, Mr. Chandan Kumar Dey for Finance, Mr. Ram Prakash Srivastava for P & IR and Mr. Binay Dayal for Technical. The company also has 2 Government Nominee Directors, seven Independent Directors. In addition to these people, there are three permanent invitees to the Board.

Market Capitalization:

As of March 2018, Coal India has a market capitalization of around Rs.173,000 cr.

Wealth and Recent Performance:

According to the results for the Q3 of the fiscal year ending 2017–2018, the total income of Coal India rose from Rs.18,759.01 crore in the second quarter too, Rs.22,484.14 crore in the Q3. The total expenses of Coal India increased from Rs.17,732.60 crore in the second quarter of the fiscal year 2018 to Rs.17,873.93 in the Q3 of the same year.

The profit before tax for the Q3 of Financial Year 2018 was Rs.4,610.21 crore. For the previous quarter, the profit before tax was Rs.1,026.41 crore. The profit before tax for the Q3 of FY17 was Rs.4,157.48 crore.

The profit for the third quarter of FY18 was Rs.3,004.79 crore, which was almost a ten-fold increase from Rs.368.88 crore in the previous quarter. The gain of Rs.3,004.79 crore was higher than the profit for the third quarter of the FY17 at Rs.2,883.27 crore.

The stock trend in 2018:

In January 2018, Coal India's stock began trading at about Rs.266. The stock gained steadily throughout the first two weeks with a high of about Rs.309. The stock dipped and won again to end the month at about Rs.299 with a profit of over Rs.30.

In March 2018, the stock price opened at about Rs.312 and dipped after that. For the first week of March, the stock did not go below Rs.300, but by the second week, it had fallen below Rs.300, and it closed for the second week of March at about Rs.278. It was a significant dip in price from the price at the beginning of the month.

Why Should You Invest in CIL?

The opening share price on the first day of trading of Coal India was Rs.291, and the closing price was Rs.342.

In 2011, the company was the most valued company of India.

In India, there are 101 coal mines, and Coal India supplies 98 of them.

Since about 70% of India's power is generated through coal, the demand for coal will increase.

In coal production, the company has crossed the half-a-billion tonne mark and shown an increase in profits from FY17 to FY18.

The company has paid out dividends which implies that it could be an excellent long-term investment.

Stocks or Mutual Funds: Here is our recommendation

A lot of research and knowledge is required in stock market investments, and generally, they don't offer any tax benefits. Hence at mymoneykarma, we merely motivate our readers to invest in mutual funds. Investing in mutual funds doesn't require a lot of knowledge, and equity-linked mutual fund schemes also provide tax benefits. In addition to it, since mutual funds contain stocks from multiple companies, they help in building a diversified portfolio.

Note: The contents of this post/blog do not constitute any professional advice on a specific financial matter.

Indexes and Exchages

Bombay Stock Exchange (BSE)

The Bombay Stock Exchange, popularly called BSE, is Asia's first and oldest stock exchange. Located at Dalal Street in Mumbai, the BSE was formally established in 1875 by an influential stockbroker and businessman called Premchand Roychand. In the initial days, the BSE had its meetings under several Banyan trees in Mumbai before finding a permanent place, which is very appropriately named Dalal Street or Broker Street. After functioning as a floor trading exchange for more than a century, BSE ascended the digital ladder in 1995 by implementing a new screen-based automated trading platform with a capacity of 8 million orders in a day. In 2012, the BSE went global by becoming a Partner Exchange of the United Nations Sustainable Stock Exchange. Subsequently, BSE established India's first international exchange, called INX, in 2016.

National Stock Exchange (NSE)

NSE was set up in 1992 by a group of leading Indian financial institutions, following the Indian Government's directives. It aimed to bring transparency to the Indian capital market. It was India's first demutualized electronic exchange which operated on a completely automated screen-based electronic trading system, offering an easy trading facility to all Indian investors. NSE began its operations in the Wholesale Debt Market segment in 1994. NSE was the first company in India to offer a digital platform that connected the investor base of the entire country. NSE offers services in various segments, such as trading, equity derivatives, clearing and settlement services in equity, debt and currency derivatives, etc.

NIFTY Index

The NIFTY is NSE's flagship index that tracks the behavior of a portfolio of blue-chip companies that have the largest and most liquid Indian securities. It is owned as well as managed by IISL (India Index Services and Products Ltd), which is India's first specialized company to focus on an index as a core product. Nifty indexes 50 of the 1600 companies on the National Stock Exchange (NSE) and is thus popularly referred to as 'Nifty 50'. It captures approximately 65% of its float-adjusted market capitalization and is a true reflection of the Indian stock market. The Nifty 50 includes the major sectors of the Indian economy. It offers the exposure to the Indian market in one efficient portfolio. The Nifty index has been trading since April 1996. It is ideally suited for index funds, benchmarking and index-based derivatives.

SENSEX Index

Sensex is BSE's stock market index. It consists of 30 well-established and financially flourishing companies listed on BSE. It was established in 1986. These 30 component companies are known for being the largest and most actively traded stocks. They represent various industrial sectors of the Indian economy. Sensex is also known as BSE 30 and S&P BSE SENSEX. The word 'Sensex' is a portmanteau of the words 'Sensitive' and 'Index.' SENSEX is widely reported in domestic and international markets through print and electronic media. The indexing system is scientifically designed, based on globally accepted construction and review methodology. Since September 2003, S&P BSE Sensex is being determined on a free-float market capitalization methodology.