corporate fds are the important way of tapping the debt
market.critically analyze any five recently launched fds
explaining their differences benefits and limitations
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Answer Posted / neeraj
A.5 Yes, corporate FD’s are important and easy method of
getting un-secured loans for Corporates.
This is an effective means to get funds with low
administrative cost at current yield.
We analyse the following 5 FD’s.
1) J K Paper Ltd.
2) Ansal Buildwell Ltd.
3) Escorts Ltd.
4) Shriram Pistons & Rings Ltd.
5) Triveni Engineering & Industries.
The comparison for Annual yield are given below :
NAME OF CO. ANNUAL YIELD(%)
1) J K Paper Ltd. 7.71
2) Ansal Buildwell Ltd. 11.57
3) Escorts Ltd. 8.77
4) Shriram Pistons & Rings Ltd. 7.22
5) Triveni Engineering & Industries. 8.77
Highest Interest is offered by Ansal Buildwell and lowest
by Shirram Pistons & Rings Ltd.
Now we evaluate the figures of the companies after
comparitive study.
NAME OF CO. Secured Loan (Crores) Un-Secured
Loans (Crores)
First Yr Sec Yr First Yr Second Yr
1) J K Paper Ltd. 383.55 452.49 55.64 58.18
2) Ansal Buildwell Ltd. 33.9 29.78 3.96 4.05
3) Escorts Ltd. 440 480 277 335
4) Shriram Pistons & Rings Ltd. 51.04 87.68 15.2
13.39
5) Triveni Engineering & Industries. 282 386
18.34 23.87
In 3 cases namely , J K Paper Ltd, Escorts Ltd and Treveni
Engineering & Industries both the secured and un-secured
loans have increased . Where as in Ansal Buildwell there is
rise in un-secured loan and fall in secured loan this is un-
usual . This is probably due to higher capital intensive
Construction Business.
In the case of Shriram Pistons & Rings Ltd , the secured
credit is rising and the un-secured loan has been reduced.
This is because of Shriram Pistons & Rings preferring
lower interest cost secured credit to costlier un-secured
loan.
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