In a blender add in the coconut, roasted peanuts, coriander leaves, green chili, ginger, and garlic. Pulse everything together to a coarse paste.
Next, add in the water and blend to a fine paste. Transfer everything to a bowl add the required water and salt.
In a tadka pan add in oil once it is hot add the mustard and cumin seeds let them splutter and then add in the dry red chili and curry leaves let them fry for few secs and then pour the prepared tadka over the prepared chutney. Mix well and serve.
Notes
Goes well with Idli, Dosa, or Pongal.
I served it with Pongal and Sambar.
Adjust the no.of green chili as per your spice level.