PPFCF holdings Coal India PPFCF holdings PPFAS Mutual Fund PSU contrarian Dividend yield Rajeev Thakkar

Coal India at PPFCF

From WebNotes, a public knowledge base. Last updated 16 May 2026. Reading time ~12 min.

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Coal India Limited (CIL) is one of the top three domestic equity holdings of the Parag Parikh Flexi Cap Fund (PPFCF) in the April 2026 disclosure. The April 2026 factsheet, reflecting AUM of Rs 1,40,949 crore (up 9.29 per cent month-on-month from Rs 1,28,966 crore in March 2026), showed Coal India at 5.95 per cent of net assets, behind HDFC Bank at PPFCF at 7.94 per cent and Power Grid Corporation at PPFCF at 6.99 per cent.

The position is widely cited, alongside Power Grid, as the canonical illustration of PPFAS contrarian investing applied to Indian public-sector undertakings (PSUs). For much of the 2015 to 2022 period Coal India was structurally under-owned by domestic mutual funds and foreign portfolio investors. The combination of ESG-related divestment pressure, concerns over declining coal demand in a renewable-energy transition, and broader PSU under-performance kept valuations depressed. PPFAS Mutual Fund was among the few large value-oriented houses to build a meaningful position during this period.

The Coal India thesis combines several PPFAS doctrines. First, PPFAS margin of safety : the stock traded at very low single-digit price-to-earnings and price-to-book multiples for extended periods, with an exceptionally high dividend yield. Second, the coal-mining monopoly: Coal India produces approximately 80 per cent of India’s coal output through its eight subsidiaries. Third, dividend yield as a return component, often in the 8 to 12 per cent range during the build period. Fourth, ESG-related contrarian positioning: the team has argued that thermal-coal demand will persist in India for decades despite the global energy transition.

This article documents Coal India’s role in PPFCF: the company background, the contrarian thesis articulated by Rajeev Thakkar , the position history through the 2026 top-three ranking, recent positioning, and the comparison with peer holdings.

Company background

Coal India Limited was incorporated on 14 June 1973 as a state-owned coal-mining company under the Coal Mines (Nationalisation) Act, 1973. The company received Maharatna status in 2011, placing it among India’s elite group of central public sector enterprises with significant operational and financial autonomy. The Government of India is the controlling shareholder, holding the majority of equity through the Ministry of Coal.

Coal India operates through eight wholly-owned subsidiaries: Eastern Coalfields Limited (ECL), Bharat Coking Coal Limited (BCCL), Central Coalfields Limited (CCL), South Eastern Coalfields Limited (SECL), Northern Coalfields Limited (NCL), Western Coalfields Limited (WCL), Mahanadi Coalfields Limited (MCL) and Central Mine Planning and Design Institute Limited (CMPDIL). The first seven are operating coal-production subsidiaries; CMPDIL provides design and consultancy services.

Coal India accounts for approximately 80 per cent of India’s coal output, producing in excess of 750 million tonnes per annum. The company’s coal supplies to power generators, including NTPC Limited , steel producers, cement manufacturers and other industrial customers. The company’s equity shares are listed on the National Stock Exchange and the Bombay Stock Exchange and are constituents of the Nifty 50 and the Sensex .

The official corporate website is coalindia.in . The registered office is at Kolkata. Coal India’s initial public offering in October 2010 was, at the time, the largest IPO in Indian history, raising Rs 15,200 crore through a 10 per cent stake dilution.

For Indian retail investors, exposure to Coal India is straightforward through direct equity purchase on the NSE/BSE or through diversified equity mutual fund schemes. PPFCF’s exposure delivers indirect ownership through a SEBI Mutual Funds Regulations 1996 registered scheme.

Investment thesis at PPFCF

The PPFAS thesis on Coal India has been articulated across multiple monthly factsheets and at the PPFAS Annual Unitholders Meet . The argument rests on several pillars.

First, PPFAS margin of safety . During the build period (broadly 2018 to 2022), Coal India traded at price-to-earnings multiples in the low single digits, dividend yields in the 8 to 12 per cent range, and price-to-book multiples close to 2x. For a business with monopoly-like share of India’s coal output and a regulated cost-plus pricing framework, the team argued the valuation was excessive relative to the underlying economics.

Second, the coal-mining monopoly position. Coal India produces approximately 80 per cent of India’s coal output. The 2020 commercial-mining auctions opened the sector to private participation but Coal India’s scale, infrastructure and customer relationships ensured continued dominance. The thesis was that India’s thermal-power generation, steel production and cement manufacturing would continue to drive coal demand for decades, irrespective of long-term renewable-energy transition trajectories.

Third, dividend yield. Coal India has been among the highest dividend-paying stocks in the Sensex and Nifty 50 . The combination of strong free cash flow generation, low reinvestment requirements and a Government of India shareholder that prefers high payouts has produced unusually high yields. For a tax-aware fund operating under PPFAS tax-aware portfolio management doctrine, the yield component meaningfully contributed to total return.

Fourth, ESG-related contrarian positioning. Global institutional investors have progressively divested from coal-mining companies on ESG grounds. PPFAS argued that this divestment created a structural valuation discount for Coal India that did not reflect the underlying economics. The team’s view, articulated in factsheet commentary, was that India’s energy transition would be gradual and that thermal coal would remain a significant share of the energy mix through the 2030s and into the 2040s.

Fifth, PPFAS contrarian investing discipline. Coal India was widely under-owned during the build period. PPFAS was among the few houses to build positions when consensus was negative.

Position history

Coal India has appeared in PPFCF disclosures across multiple periods. The position was built incrementally during 2018 to 2022 when PSU valuations were depressed and ESG-related divestment pressure was at its peak. The February 2022 SEBI MF overseas investment cap freeze created a structural pivot in which incremental inflows had to be deployed domestically. PSU positions including Coal India and Power Grid became natural recipients of this redeployment.

Through 2023 and 2024 the PSU complex re-rated meaningfully. By the April 2026 disclosure, Coal India was the third-largest equity holding at 5.95 per cent of net assets, behind HDFC Bank at 7.94 per cent and Power Grid at 6.99 per cent. The combined Coal India and Power Grid weighting (approximately 13 per cent of the portfolio) represents the practical expression of the PSU contrarian thesis in the top tier of PPFCF.

Recent positioning

The April 2026 PPFCF factsheet showed Coal India at 5.95 per cent of net assets within an AUM of Rs 1,40,949 crore. The May 2026 commentary on PPFCF carrying around 18 to 22 per cent in PPFAS cash holdings reflected broader valuation caution across the equity sleeve, but Coal India has remained a core position.

In monthly factsheet commentary, Rajeev Thakkar and Neil Parag Parikh have referenced Coal India’s free cash flow generation, dividend yield and monopoly position in coal production as supports for the thesis. The team has indicated that valuations remain reasonable even after the 2023 to 2026 re-rating.

Comparison with peer holdings

Within PPFCF, Coal India sits alongside Power Grid as the two PSU anchors, alongside HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Bajaj Holdings at PPFCF , ITC at PPFCF , Maruti Suzuki at PPFCF , Mahindra and Mahindra at PPFCF , the technology cluster (Infosys at PPFCF , TCS at PPFCF , HCL Technologies at PPFCF , Persistent Systems at PPFCF ), pharmaceuticals (Cipla at PPFCF , IPCA Laboratories at PPFCF ) and rating-agency ICRA at PPFCF .

Compared with Power Grid, Coal India offers commodity-price exposure rather than purely regulated-return economics. Compared with HDFC Bank, Coal India provides a different cash-flow profile (high dividend payout vs reinvestment in loan-book growth). Compared with international anchors Alphabet at PPFCF , Microsoft at PPFCF , Amazon at PPFCF and Meta Platforms at PPFCF , Coal India provides rupee-denominated cash flows that complement the dollar-revenue exposure of the foreign sleeve.

Within the broader PPFAS focused portfolio and PPFAS contrarian investing framework, Coal India is the textbook illustration of the doctrine applied with a contrarian ESG overlay: a deep-value entry into a high-quality dominant business when the market was overlooking the PSU complex on transition concerns, held patiently through years of underperformance, and rewarded with significant re-rating.

Context within PPFCF

PPFCF was launched on 24 May 2013 as Parag Parikh Long Term Value Fund (PPLTVF), renamed Parag Parikh Long Term Equity Fund on 16 February 2018 and renamed Parag Parikh Flexi Cap Fund on 13 January 2021. The scheme is benchmarked against the Nifty 500 TRI and has delivered a compound annual growth rate since inception of approximately 19.06 per cent against a category average of 15.22 per cent and the Nifty 500 TRI at 12.4 per cent. AUM crossed Rs 1 lakh crore in May 2025, making PPFCF the first active equity mutual fund scheme in India to do so, and rose to roughly Rs 1.6 lakh crore by 15 May 2026.

The fund is managed by Rajeev Thakkar along with Raunak Onkar , Raj Mehta , Rukun Tarachandani and other team members. Parag Parikh , the founder of the Parag Parikh Financial Advisory Services Limited sponsor entity, established the investing house in 1979 and incorporated PPFAS Ltd in December 1992. The mutual fund was set up with SEBI on 10 October 2012 under registration ID MF/069/12/01.

Coal India’s emergence into the PPFCF top three has been a recurring topic at the PPFAS Annual Unitholders Meet . The 12th edition was held on 22 November 2025 at Birla Matushree Sabhaghar in Mumbai.

External references

Coal India Limited: coalindia.in
Ministry of Coal, Government of India: coal.nic.in
PPFAS AMC factsheet archive: amc.ppfas.com/downloads/factsheet
PPFAS scheme page (PPFCF): amc.ppfas.com/schemes/parag-parikh-flexi-cap-fund
SEBI: www.sebi.gov.in
AMFI member page: amfiindia.com/member/64

References

PPFAS Mutual Fund, October 2025 factsheet, amc.ppfas.com .
PPFAS Mutual Fund, March 2026 factsheet, amc.ppfas.com .
INDmoney, “PPFAS Flexi Cap April 2026 portfolio update,” indmoney.com .
Angel One, “Parag Parikh Flexi Cap Fund crosses one lakh crore AUM,” angelone.in .
Business Today, May 2026 cash commentary, businesstoday.in .
Coal India Limited, Annual Report 2024-25, coalindia.in .
Ministry of Coal, Government of India, sector statistics.

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Last reviewed: 16 May 2026
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