Mumbai, December 20, 2018: New analysis (1) shows that major Indian and international equity investors have seen their holdings in key Indian coal mining and coal-based power companies underperform the Bombay Stock Exchange Sensex by an average of ~10% per year since 2013, costing billions of dollars in foregone returns.

Analysis by research firm Equitorials[1] shows that equity investments by 16 top institutional investors in 8 major listed companies (see notes for tabulated results and entities involved) in the coal mining and coal power sector have underperformed the benchmark BSE Sensex by over 10% p.a. Between December 2013 and October 2018. Most, if not all, of these funds are actively managed. These findings come even as the focus on the global financial sector’s contribution to climate change through its support of fossil fuel industries is under the spotlight.

India’s public sector banks and non-banking finance corporations such as PFC are already facing scrutiny over their lending to poorly planned coal power projects, and the NPAs and stressed loans that have resulted. This analysis shows that banks are not the only ones to have been “burnt by coal” – leading mutual funds and international institutional investors have all seen miniscule returns from their coal equity holdings. Among the Indian institutional holdings analysed are public sector giants LIC, UTI and SBI Mutual Funds, as well as private sector names such as DSP, Reliance Nippon, ICICI Prudential, Aditya Birla Sun Life and HDFC. International institutions such as Blackrock, Goldman Sachs, Franklin Templeton, Fidelity, Vanguard, HSBC, Standard Life Aberdeen and Deutsche Bank were also looked at.

Key findings:

  • The average rate of return earned by these holdings across investors was just 0.5% per annum for the last five years.
  • If the same pattern of trading adopted by each institutional investor had been maintained for Sensex units instead of these 8 coal company stocks, the average rate of return would have been nearly 11% p.a.
  • In other words, simply replacing the same value of equity investments in coal companies with S&P BSE Sensex would have yielded these investors a 10.4% higher average return on an annual basis from December 2013 to October 2018.
  • Cumulatively, this translates into over 25,000 crores / US $3.5 billion in foregone returns.

“The financial industry can play a role in catalyzing an energy transition away from coal and towards clean, renewable energy,” said Ashish Fernandes of Greenpeace. “We know the damage coal is causing to India’s environment, its economy and to the health of millions – this analysis now shows that coal equities are no longer even earning financial rewards for investors!”

Despite the poor returns over the last five years, many investors have increased their stakes in some of the companies under consideration over the last one year.

“The downside for coal in India is considerably more today than it was in 2013, given the triple threats of air pollution, water scarcity and climate change. Apart from the very serious moral issues at stake, the hardcore financial question before fund managers is really what level of returns over what time horizon would justify a continued gamble on these coal company stocks? If the answers to those questions are unrealistic, perhaps that money would be more productively invested in less damaging sectors of the Indian economy”, added Fernandes.

Among the institutions that have increased their stakes in coal companies are DSP, which has increased its holdings in Adani Power, Tata Power and Jindal Steel & Power relative to 2017.  HDFC has raised its stake in Adani Power, Coal India, Jindal Steel and Power and NTPC. Among public sector entities, SBI Mutual Funds has raised its stake in Coal India, JSW Energy, NTPC and Tata Power over the course of 2018, LIC has increased its holdings in Coal India and UTI has done likewise for NTPC and Tata Power.

Among global institutions, Deutsche Bank has been increasing its holdings in Coal India, Jindal Steel & Power, NTPC and Tata Power over the course of 2018, while Blackrock and Goldman Sachs have significantly increased their holdings in Jindal Steel & Power Ltd. Franklin Templeton has increased its Tata Power holdings relative to 2017.


  1. Analysis available at
Institutional Investor XIRR on coal equities* BSE Sensex XIRR Underperformance (Annualised)
Aditya Birla SL MF 0.9% 12.5% -11.6%
DSP MF** -0.2% 10.8% -11.0%
Franklin Templeton MF 1.6% 15.0% -13.4%
Goldman Sachs MF 0.0% 10.9% -10.9%
HDFC MF 2.9% 11.2% -8.3%
HSBC MF -2.8% 12.0% -14.8%
ICICI Pru MF 1.5% 11.3% -9.8%
Reliance Nippon MF 2.4% 13.8% -11.4%
SBI MF 2.5% 11.9% -9.4%
UTI MF 4.5% 14.1% -9.6%
LIC 3.7% 11.3% -7.6%
Standard Life Aberdeen PLC -5.5% 12.1% -17.6%
Deutsche Bank AG 0.9% 9.1% -8.2%
Fidelity International Ltd -2.9% 7.9% -10.8%
Vanguard Group Inc 0.8% 10.4% -9.6%
Blackrock Inc -2.6% 10.4% -13.0%
Average 0.5% 10.9% -10.4%

* Adani Power, Coal India, Jindal Steel & Power, JSW Energy Ltd, Lanco Infratech, NTPC, Reliance Infrastructure Ltd, Tata Power.

**Includes DSP Blackrock holdings prior to the May 2018 split.


Ashish Fernandes, Senior Campaigner; [email protected]

Anindita Datta Choudhury, Senior Communication Specialist; [email protected], +91 9871515804; +91 9315608925

[1] Equitorials is an equity research firm focusing on investment analysis in the Indian stock markets.

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