The Hindu Business Line : FD Options

OCL India: Investors may consider the one- and three-year options of the OCL India fixed deposit plan;. the two-year option does not offer any premium over the rate on the one-year option for the longer duration. OCL India is in the business of cement and related products. The company's financials are in healthy shape. With an improvement in cement prices, the profitability and earnings levels are likely to comfortably cover the interest outgo.

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 also 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.

City Union Bank: Senior Citizens can consider investing in the short-term deposits of City Union Bank. The bank offers 6 per cent for deposits maturing in six months, 7 per cent for the one-year tenure and 7.50 per cent for two/ three-year deposits. The rates are competitive and higher than that on post office time deposits. Insurance for deposits of value less than Rs 1 lakh made in scheduled commercial banks make the scheme even more attractive. Deposits for a term longer than three years however can be avoided. Small savings schemes are more attractive for such deposits.

India Cements: An investment in the one- and two-year options may be considered. The rates of 8.0 per cent and 8.5 per cent are attractive compared to what is on offer from a host of other companies. The improvement in the cement price levels in the southern market over the past couple of months is likely to lead to a turnaround. But unless this is accompanied by a healthy growth in volumes, any turnaround may be shortlived. If the company manages to raise equity in line with its plans, it would enhance the comfort level for investors in its fixed-deposit programme. The cumulative and the three-year options can be avoided, as the incremental returns do not compensate for the higher risk element.

BL RESEARCH BUREAU

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