Gati FD scheme – December, 2013 – Interest of 14.19%-Can we invest?
Gati FD Scheme opened now in December, 2013 indicates higher interest rates than its earlier FD Schemes. Gati FD Scheme indicates an yield of 14.89% per annum for employees and Senior citizens, but the general public would get a yield of 14.19%. Can we invest in a Gati Fixed Deposit scheme of December, 2013 to get higher returns. What are the potential risks involved? Read our complete analysis before you take a decision for investing in the Gati FD scheme.
About Gati Limited
Gati is pioneer in providing supply chain and distribution solutions in India.
Features of GATI Fixed Deposit (FD) scheme
- GATI FD scheme is available in Cumulative scheme and non cumulative scheme options.
- For non-cumulative scheme, Interest is compounded quarterly and payable quarterly.
- For cumulative scheme, interest is compounded quarterly and payable at maturity.
- The minimum FD amount is Rs 21,000 and any amount in multiples of Rs 1,000 beyond this.
- Deposits available for 1, 2 and 3 year tenure.
- ECS facility available for payment of interest on non-cumulative deposits.
- Company says “easy liquidity of deposits”, hence I am assuming that there are no pre-mature withdrawal penalty. There was no clarity on this in the media advertisement issued yesterday.
- Employees of Gati Limited or Senior Citizens would get 0.5% interest rate more.
- Care rated Gati Limited as BBB+
Gati Fixed deposit scheme of December, 2013 has following interest rates:
How to apply for GATI FD Scheme
- You can apply online through any of the Bajaj Capital or Axis Capital centres or its subsidiaries or through any brokers like ICICI Direct, etc.
- You can also directly visit the above centres and prepare a cheque in favor of “GATI Limited” and deposit at collection centers indicated in the application.
Why to invest?
- Interest rates are high. Yield comes to 14.19% per annum for 3 year FD scheme.
- Company is paying good dividend. It paid 25%, 55% and 30% dividend for the financial year ended Jun-2011, Jun-2012 and Jun-2013 years respectively.
Why not to invest
- Profits have declined in the year ended Jun-2013 to more than 72% compared to its previous financial year which is a concern.
- Profits for the quarter ended Sep-2013 are just at Rs 17 Mn as against Rs 102 Mn for the quarter ended Jun-2013 or comparing to Rs 63 Mn for the quarter ended Mar-2013. Means there is a downward trend in profits. By issuing more Fixed deposits and paying higher interest rates, the profits would further shrink.
- Unsecured FD scheme. In case of any unforeseen thing happening to the company, FD scheme investors would get less priority on repayment of the amounts.
Conclusion: While I am interested to grow my money at a faster pace by investing in various investment options, I am equally interested in protecting my money. While such companies would have been doing well in the past, in the current scenario considering such negative points, investors should be little cautious before investing in such companies.
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GATI Fixed deposit scheme
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