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8/8/2019 Coal India Ltd- Diana (Final)
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Perspective Management
Coal India Ltd
Prof. Vijay Shahane
Diana Daniel JacobRoll no: 19
MMS 1st YearCoal India Limited (CIL) is a PSU of the Government of India headquartered inKolkata, India and the world's largest coal miner. CIL’s initial public offering of
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Rs.15,200-cr is set to become a global industry benchmark. Global coal producers are
currently quoting at a price to earning (PE) multiple of 17-24 times. As per expected
price band of Rs 225-245, CIL’s PE ratio works out anywhere between 14 and 17 timeson an earnings per share (EPS) of Rs 15.6 for 2009-10. The pricing of CIL issue is thus
very competitive, attracting increased retail investors and supporting the
Government’s aim of disinvestment and helping it raise Rs. 14,000-15,210 crore i.e.more than a third of its target of Rs. 40,000 in the upper price band.
Vision
To emerge as a leading global player in the energy sector by adopting best practices from
mine to market to company’s policies with emphasis on responsibility towards the
employees’ safety, competitive stakeholders’ return and sustainable development of the
society akin to a professional organization.
Mission Statement
Cater the increasing demand of coal sufficiently, efficiently and economically with due
regard to safety, conservation, quality and value.
SWOT Analysis
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Strengths:
Financially profitable, debt free, financially sound company who always pursued
a strategy aiming at physical volume growth.
Cost competitive advantage over international players since nearly 90% of its
production is from open cast mines and has low stripping ratios. Coal India’s near-monopoly position, market-linked sales and strong secondary
markets.
Strong cash generation and very low gearing.
Weaknesses
Operations of CIL are subject to various risks inherent to mining activities. But,they don’t maintain insurance coverage in accordance with applicable industry
standards and any failure to comply with such requirements in a timely manner
may adversely affect its operations. Its public sector mindset.
Opportunities
Indian Coal Demand to Grow at a CAGR of 11% by FY 2013.
Increasing Global energy demand.
Threats
Stricter emission norms.
Severe competition from natural gas.
The deregulation in the electricity industry has also resulted in pricing pressures.
Delays in regulatory approvals, such as forest clearance.
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Delphi Technique
Delphi Panel
Member of Coal Ministry, India
Environmentalist Senior Government official (Energy sector)
Member of Planning Commission
Heads of CIL’s other subsidiaries
Questionnaire
1. How to tackle inter-fuel competition?
2. How to safeguard market share from increasing unrestricted competitionfrom the private sector?
3. Impact of Government policies in the energy sector?
Scenario Planning
a. Surging energy demand b. Supplies will struggle to keep up
c. Stresses on the environment are increasing thus increasing use of renewable
sources of energy
While abundant coal exists in many parts of the world, transportation difficulties and
environmental degradation ultimately pose limits to its growth.
Clean Coal technologies (technology and innovation) to reduce harmful emissions,
improvements in coal-mining operations, technology to help operate in new, challenging
environments and squeeze more from existing resources due to dwindling supply.