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Sowmya Sundar

THE fixed deposit programme of Saw Pipes is suitable for those willing to take that extra bit of risk to get higher returns.

An investment in the company's FD programme can be considered if such low-risk options as small-saving schemes have been exhausted.

Among the manufacturing companies, the deposit programme of Saw Pipes offers higher incremental return for longer tenures.

This makes it attractive in the rising interest rate scenario.

This programme may not be suitable for those with a smaller investment portfolio of deposit products of less than one lakh.

The minimum investment limit is high at Rs 21,000. It may not be advisable to lock in a substantial amount in a riskier deposit programme.

Saw Pipes makes arc welding pipes used in transportation of oil and gas. The business prospects appear bright at least for the next couple of years as all oil majors are planning substantial capital investments on improving the pipeline infrastructure in the country.

The scope for robust revenue growth may not translate into profits because of the rising prices of steel, the main raw material.

The interest cover at just over three times the profits before interest payment is comfortable in the near term.

However, the risk element stems from the possibility of further pressure on margins due to higher input prices, which could compress the profit cushion available for meeting interest payments.

Scheme features: The company offers cumulative and non-cumulative schemes.

The rates are 7 per cent for one year, 8 per cent for two years and 9 per cent for three years.

The cumulative scheme is compounded at quarterly rests and the annual yields are 7.19 per cent for one year, 8.58 for two years and 10.20 for three years.

Interest under the non-cumulative scheme is paid at quarterly intervals.

The minimum deposit requirement is Rs 15,000 for the cumulative scheme and Rs 21,000 for the non-cumulative scheme.

The company's address is Jindal Centre, 12, Bhikaji Cama Place, New Delhi — 110066.

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