The Hindu Business Line : Fenner India: Park your funds in one-year option

Fenner India: An investment may be considered in the one-year option of Fenner (India). The rates on offer for the two- and three-year options are not attractive; the rate for the latter does not offer any premium for longer maturity. The one-year option may be considered only to park funds that may otherwise idle in a savings bank account. The minimum investment amount is Rs 5,000. Interest is paid on a quarterly basis. Fenner is in the engineering business and makes a range of products that find application in several industries. The outlook for revenue growth appears bright, given the buoyancy in the engineering and construction sectors. Though there was a dip in earnings in FY05, they still remain at healthy levels and offer a high degree of comfort for investors in the fixed-deposit programme. The company's fixed deposits account for only about 65 per cent of what it is entitled to accept. So investors can exhaust superior options in the FD space before contemplating adding Fenner to their FD basket.

Sundaram Industries: Investors can consider the option of parking their funds in the fixed deposit scheme offered by Sundaram Industries. The deposit, of one-year maturity, period carries an interest rate of 6.52 per cent. Forming part of the TVS group, Sundaram Industries manufacturers moulded rubber components. It caters to the automotive as well as the industrial segments. Helped by robust demand from both segments, the company reported strong growth in earnings in the recent years. The growth tempo is likely to be sustained if the performance of the user segment is any indication. As there is scope for an interest rate hike in India, investors may settle for the one-year deposit and capitalise on better opportunities, as and when they crop up.

Shriram Investments: Investments can be considered in the high-yielding fixed deposit and debentures schemes of Shriram Investments. The company offers 7.75 per cent for a three-year cumulative fixed deposit and 8.40 per cent for a three-year cumulative debenture. It offers 7.50 per cent for a three-year non-cumulative fixed deposit and 8.0 per cent for a three-year non-cumulative debenture. The offer is attractive and the risks are now lower, considering the business growth and the capital infusion made in recent years.

Cholamandalam Investment: Investment in the one-year fixed deposit programme of Cholamandalam Investment & Finance Company can be considered. The company offers 6.0 per cent with interest being paid either quarterly or annually.

For monthly interest payments, the minimum period of investment is three years; this can be avoided. Cholamandalam is one of the safer investment options in the NBFC arena. The rate of interest is also attractive compared to other investment options such as bank term deposit and is only 0.25 percentage points lower than that of Post Office Term Deposit.

Premature withdrawals before three months are not allowed. Withdrawals after three months also attract penalty in the form of a reduction in the contracted interest.

For withdrawals between three and six months, no interest would be paid. For withdrawals after six months, interest paid will be 4.5 per cent.

BL Research Bureau

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