Wash and soak the raw rice in enough water for 4 to 5 hours. Drain well before grinding.
In a blender or wet grinder, add the soaked rice, grated coconut, and cooked rice. Add water little by little and grind to a smooth batter. The consistency should be slightly thinner than dosa batter.
Transfer the batter to a large bowl. Add salt and sugar. Mix well.
Dissolve the yeast in 2 tablespoons of warm water with a pinch of sugar. Let it sit for 5 minutes until frothy. Add this to the batter and mix gently.
Cover the bowl with a lid or cloth and let the batter ferment in a warm place for 8 to 10 hours or overnight. The batter will rise and smell slightly tangy.
After fermentation, gently stir the batter. If it looks too thick, add a few tablespoons of water or coconut milk to adjust consistency.
Heat an appam pan on medium flame. Grease lightly with oil or ghee using a brush or cloth.
Pour a ladleful of batter into the center of the pan. Immediately lift the pan and swirl it in a circular motion so the batter spreads thin on the sides and stays thick in the center.
Cover the pan with a lid and cook for 2 to 3 minutes on medium flame. The edges will turn golden and crisp, and the center will be soft and cooked through.
Remove the appam gently using a flat spatula. Do not flip. Repeat with the remaining batter, greasing the pan lightly before each appam.
Notes
Use an appam pan or appachatti for best results. A small nonstick pan with a rounded base can work as a substitute.If you want instant appam, skip yeast and add half a teaspoon of baking soda to the batter just before cooking. Rest for 10 minutes and cook.Leftover batter can be stored in the fridge for up to 2 days. Bring to room temperature before using.The batter thickens as it sits. Add water or coconut milk as needed to maintain the right consistency.For softer appam, add a tablespoon of coconut milk to the batter after fermentation.If the batter does not ferment well, place the bowl in a warm spot like near a gas stove or inside an oven with the light on.You can freeze cooked appam. Reheat in a pan or microwave before serving.