Soak: Wash and soak the raw rice in water for at least 4 to 5 hours.
Grind: Drain the water. In a mixer or grinder, add soaked rice, grated coconut, and cooked rice. Grind into a very smooth paste using little water.
Ferment: Transfer the batter to a large bowl, add salt and sugar. Mix well with your hand. Cover and let it ferment in a warm place for 8 hours or overnight.
Consistency: The fermented batter should be airy. Add a little water if needed to get a pourable, thin consistency (thinner than dosa batter).
Cook: Heat an appam chatti (kadai). Pour a ladle of batter, swirl it to coat the sides. Cover with a lid and cook on medium flame for 2 minutes until the edges are crispy and the center is soft.