Industry Profile: Mining as a primary sector of economics is essential for development, not for employment but utilization of natural resources. Minerals constitute the backbone of the economic growth of any nation, and India has been eminently endowed with this gift of na­ture. There is much evidence that the exploitation of minerals like coal, iron ore, copper, and lead-zinc has been happening in the country from time immemorial. The Mining industry in India is a significant economic activity that contributes significantly to the economy of India. The GDP contribution of the mining industry varies from 2.2% to 2.5%, but going by the GDP of the entire industrial sector, it contributes around 10% to 11%. Even mining done on a small scale contributes 6% to the total cost of mineral production. The Indian mining industry provides job opportunities to around 700,000 individuals.

However, the first recorded history of mining in India dates back to 1774, when an English Company was granted permission by the East India Company to mine coal in Raniganj. M/s John Taylor & Sons Ltd. started gold mining in Kolar Gold Fields in 1880. The first oil well was drilled in Digboi in 1866 – just seven years after the first-ever oil well was drilled anywhere in the world, viz. in Pennsylvania state, the USA, in 1859. However, mining activities in the country remained primitive in nature and modest in scale until the beginning of the current century. After that, with progressive industrialization, the demand for and hence the production of various minerals gradually increased. After India became independent, the growth of mining under the impact of successive Five Year Plans has been swift. There are ambitious plans in the coal, metalliferous, and oil sectors to increase the in­crease production of minerals during the 8th Five Year Plan and after that.

Company Profile: Coal India is a Holding company of seven companies and one mining consultancy company. It is the largest coal miner with a capacity above 400+ million tonnes. India is the third-largest producer of coal after China and the US. The company holds 82 mining areas. Coal India is behind 40% commercial energy production and 80% coal mining. The company supplies 98 out of 101 power plants at a discounted price than international Coal Prices.

Shareholding Pattern: BSE Shareholding Filings

Financials and Ratio  :  [table id=66 /]

Future Prospects: Due to the business model, there is massive cash on the balance sheet. It’s completely acceptable that if the government owns the company, it will try to use that cash to cover the Fiscal deficit. But when the size of the Dividend is larger than the company’s profit, it is not suitable for the company. Coal India is not the company that is consolidating. It is growing its production. For that, the company needs cash. So govt treat it as a cash cow, trying to cover their deficit from money on the balance sheet. It is affecting the balance sheet as the quality of the balance sheet is deteriorating.