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Sumeet Industrues has launched fixed deposits for a time frame of one, two and three years respectively. The minimum amount of investment is Rs 20,000 and in multiples of Rs 1,000 thereafter. Surat based, Sumeet Industries is in the textile business with a spinning capacity of 100,000 TPA. It manufactures and exports pet chips, polyester yarn and polypropylene yarn.
Product
Interest on the fixed deposit will be compounded monthly and paid quarterly or on a cumulative basis. For a one year deposit you will get 12%, for two years 12.25% and for three years 12.5%. Premature withdrawal is possible after the completion of six months but you may have to pay a penalty of 2% on the original interest rate. You will receive post dated interest warrants.
Why invest
The interest rate of 12.5% pa is higher by 300-350 basis points than that offered by most banks. The company is profit making and dividend paying. It posted a net profit of Rs 19.15 crore for the year ended March 2013.
Why not to invest
Company fixed deposits are unsecured and illiquid. Interest income from company fixed deposits is taxable and for those in the highest tax bracket the post tax return works out to a mere 8.67%. As of March 2013, 55.42% of the promoter shareholding is pledged.
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