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Is Coal India's Underperformance Set to Change?
Aug 2, 2019

Take Coal India. It has the world's largest coal reserves. That means it has abundant resources. Demand for coal has not waned. And yet, the company consistently fails to meet this demand and overall expectations.

The company has consistently fallen short of its targets. What more, it has not been able to meet its revised targets either. Meanwhile, imports of the fuel have surged.

It does not make sense. If Coal India is blessed with sufficient resources, why is India still importing coal?

Clearly, inefficiency is the root problem here.

The Modi government is looking to change this. The government needs funds. Disinvestment is going to be one of the sources of these funds.

So it only makes sense to bring in more transparency in how Coal India operates.

One of the proposals that is being considered is spinning off units of Coal India into separate listed companies. What will this achieve? One, it will fill up the government coffers. Second, it will bolster competition. Competition is a strong motivation to get any organization in top shape.

Data Source:Ace Equity

This Chart Of The Day was published in The 5 Minute WrapUp - Coal India and LIC Could Unleash the Next Big Money Making Opportunity...

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