Financial Daily from THE HINDU group of publications
Sunday, Nov 24, 2002
Financial Daily from THE HINDU group of publications Sunday, Nov 24, 2002 |
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Investment World
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Fixed Deposits Money & Banking - Fixed Deposits Sundaram Finance: High on credit G. Madhan
THE fixed deposit programme of Sundaram Finance could be a good option for investors with a low risk profile. The interest rates offered by the company are quite attractive in the wake of the recent decline in the interest rate level. Sundaram Finance is in the business of hire-purchase and lease financing of commercial vehicles, cars and machinery finance. The company's credit quality is on the high side and it also has a good track record and reputation for timely interest payment and repayment of principal. Financial performance: In the half year ending September 2002, the company's net profit went up by 8.2 per cent to Rs 22.88 crore compared to that of the corresponding previous period. However, the income from operations for the same period went down by 1 per cent to Rs 228.50 crore. For the year ending March 2002, the company's debt-to-equity ratio stood at 3.71. For 2001-02, the capital-to-risk assets ratio stood at 18.27 per cent, higher than 12 per cent prescribed by the RBI. The gross non-performing assets (NPA) for the same period stood at 4.71 of the total assets compared to 6.14 per cent in the previous year. Given the company's track record, one need not worry about the safety of funds invested, as the company may not face any problems in servicing its fixed deposit base. Investors can consider the one- and two-year regular payment option. Those willing to take the risk of an interest rate change can consider the three-year option too. Investors preferring the monthly interest payment option can also opt for the three-year.
Schemes and features: Under the fixed deposit programme, an investor has a choice of cumulative and non-cumulative (fixed income) schemes. Under the fixed income scheme, the company offers monthly and quarterly income plans. Under the quarterly income plan, the investor can choose between three tenors — one, two and three years. The interest rates that are offered for these tenors are 8 per cent, 8.5 per cent and 9 per cent respectively. Under the monthly income scheme, only the three-year tenor is available at 8.93 per cent. Under the cumulative deposit scheme, there are three tenors. For the one-two- and three-year tenors, the interest rates are 8 per cent, 8.5 per cent and 9 per cent respectively. The minimum investment across the schemes is Rs 10,000.
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