The Hindu Business Line : Jindal Steel and Power: Invest in one-year option

The interest rates offered are 7 per cent for one year, 7.25 per cent for two and 7.5 per cent for three years. The minimum deposit is Rs 10,000 in the case of cumulative scheme and Rs 25,000 for non-cumulative scheme. Low-cost sponge iron operations along with backward integration (it has captive power plant) have helped the company improve its profitability over the past few years. A better product mix, skewed largely towards finished steel products is likely to mitigate the price risk, in the event of a cyclical downfall, if any. Margins have been fairly consistent at about 35 per cent, with earnings at healthy levels; the company appears to be in a comfortable position to honour its interest obligations in the medium term. In the long run, the company is likely to benefit from its power business, thereby mitigating the risk associated with the cyclical business.

Wheels India: An investment may be considered in the three-year FD option of Wheels India. The rate of 7.5 per cent on offer is attractive. Choose the cumulative option, as it offers a slightly higher yield of 7.7 per cent. The rates on offer for the one- and two-year options are 6 per cent and 6.5 per cent. There are other companies such as OCL that offer higher rate for these tenors. Wheels India is a TVS group company manufacturing wheel rims. It caters to the requirements of manufacturers of passenger cars, commercial vehicles, tractors and jeeps. The company has a stranglehold in this market. Despite the growth numbers being lower than the past two years, they are on a high base, courtesy the robust increase during this period. There is healthy demand for the company's products. The company has also expanded its exports; it also now manufactures air suspension systems for commercial vehicles and buses. This could provide a boost to revenues. The financials of Wheels India are in excellent shape and investors in the FD programme have no cause for worry. For deposits from the public, the company has exhausted much of the available limit. So investors should use the window that is now open to invest in the three-year option. Do not let the minimum amount of Rs 21,000 deter an investment decision. For deposits from shareholders, Wheels India has greater leeway on the available limit. Shareholders should use the option to lock in a part of the funds that they have earmarked for investing in fixed-income investments.

Srei Infrastructure Finance: Investments in the one-year fixed deposit programme of Srei can be considered. The company offers 7.25 per cent for a one-year cumulative term deposit. The interest rate is attractive, considering housing finance companies and bank offer rates that are lower by more than one percentage point. In addition, from this financial year, the interest from bank deposits and housing finance companies do not enjoy the protection under Section 80-L. Srei is a fast growing non-banking finance company specialising in infrastructure project financing which has attracted equity investments from international institutions such as IFC of Washington and FMO of the Netherlands. The company boasts of strong capital adequacy and has also low incidence of bad loans. The fixed deposit programme is appropriate for investors with a one-year investment horizon.

More Stories on : Fixed Deposits | Fixed Deposits

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page