Unitech Ltd – FD scheme – Yield of 15.07% per annum-Review

Unitech Fixed deposit schemeUnitech Ltd – Fixed deposit scheme – Yield of 15.07% per annum-Review

Last week couple of my friends got an email about Unitech fixed deposit scheme which indicates that the effective yield is 15.07% p.a. They have forward the e-mail asking me to analyze and let them know whether they can invest it. Though, Unitech fixed deposit schemes have been issued for some time, it caught my attention when it indicated such high interest rate. Can we invest in Unitech fixed deposit schemes? What are the risks involved?

About Unitech Ltd

Unitech Ltd is a New Delhi based real estate developer in India. It is India’s most geographically diversified real estate developer with properties in Gurgaon, Noida, Bangalore, Chennai, Kolkata, Lucknow, Mysore, Mohali, Ambala, Rewari and Bhopal. Its land reserves of thousands of acres have some of the most premium apartments, luxury villas & well-planned townships in Noida, Gurgaon, Kolkata, Bangalore and Chennai. Unitech luxury homes are crafted and designed especially for the aficionados of luxury. ‘The Villas’ in Uniworld Resorts, Gurgaon is a stunning example of the same.

Also read: Mahindra Fixed deposit scheme – Should we invest?

Features of Unitech Ltd Fixed deposit scheme

Below are the features of the Unitech Ltd Fixed deposit scheme.

It offers the FD scheme Non cumulative and Cumulative options.

Scheme-A – Non cumulative fixed deposit scheme

Unitech Ltd – Fixed deposit scheme – Non Cumulative Scheme

  • Additional amount in multiples of Rs.1,000/- can be invested.
  • Interest would be paid every quarter.
  • Interest will be compounded quarterly and calculated from the date of realization of the cheque/draft.
  • Post-dated Interest cheques from the date of realization for the financial year will be sent in 15 days prior to due date of the first interest cheques.
  • TDS would be deducted at 10% per annum if PAN card is submitted, else the TDS rate would be 20% per annum.
  • Nomination Facility is available

Scheme-B –Cumulative fixed deposit scheme

Unitech Ltd – Fixed deposit scheme – Cumulative Scheme

  • Additional amount in multiples of Rs.1,000/- can be invested
  • Interest is compounded monthly and payable on maturity.
  • The amount of interest due on maturity, after deducting TDS, if applicable, would be sent 15 days before the date of the maturity.
  • Post-dated cheque for repayment of Principal amount will be dispatched along with interest cheque indicated above.
  • TDS would be deducted at 10% per annum if PAN card is submitted, else the TDS rate would be 20% per annum.
  • Nomination Facility is available.

Risks involved:

  1. It’s managing director Sanjay Chandra, an accused in the 2G spectrum allocation case, was given clean chit by CBI in the telephone conversation row during Mar, 2013. As per media reports the investigating agency (CBI) found that the conversation between the Chandra and AK Singh had no impact on the prosecution of the 2G case. We should wait and watch for any further news on this in future.
  2. Company has posted a negative revenue growth of (-12.7%) in FY2012-13 compared to its previous financial year.
  3. Company profits have declined from 27.12% (FY12) to 14.43% (FY13).
  4. This is a fixed deposit scheme like any other company fixed deposit. It may involve risks in repayment of interest or principal.
  5. Company is into Real estate sector business where there is stiff competition and pressure on margins.

Also read: How to file income tax return online

Conclusion: Investors may get attracted towards Unitech fixed deposit scheme due to its high yield. All company fixed deposit schemes are high risk, high return investments. I am not un-favor to corporate fixed deposits. However, considering negative revenue and profitable growth, it would be high risk to invest in such fixed deposit schemes. 

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Suresh
Unitech Ltd – Fixed deposit scheme – Yield of 15.07% per annum

28 comments

  • Ravi

    UniTech is not paying FD maturity amounts for the last one year and recently is filing Form 8 with Company Law Board to see extension ranging from 9 to 42 months. UniTech claims they will pay interest for the extension period.
    One way to make these companies respond is – lodge a complaint with Ministry of Corporate Affairs. It is rather easy process and can be done online. Below link has details.
    http://www.mca.gov.in/MinistryV2/complaints.html

    If you still see delay you can approach Company Law Board and lodge a compliant. This is an offline process and you need to pay a nominal fee of INR 50.

  • Padmanabhan.K

    My two Fds matured in january and feb.for 2 lakhs each duly submitted for refund does not receive any attention, no proper reply, unable to contact the section/people concerned,when contacted with much difficulties get vague reply.
    What is the solution?

  • M K P Kumar

    Amount against FDR # 1221113 matured on 6th June 2014 not yet credited to my Bank A/C

  • M K P Kumar

    My FDR # 1221113 matured on 6th June 2014 but the amount has not yet been credited to my Bank A/C. Please let me know the status. Thanks.

  • anand

    It appears that Unitech has given jitters to many FD investors. People should not invest in such company ,who does not respond to calls or mails and leaves the investors in helpless situation. Hope it is not going the Sahara way. So never invest for 1-2 % extra gains at the cost of loss sleep.

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