P.N. Gadgil & Sons fixed deposit scheme offers 7% interest rate

By Livemint
P.N. Gadgil and Sons has announced the launch of its unsecured company fixed deposit scheme offering an interest of 7%. (Photo: iStock)

NEW DELHI: Gold jeweller P.N. Gadgil and Sons has announced the launch of its unsecured company fixed deposit (FD) scheme offering an interest of 7% on a minimum deposit of 1 lakh for a lock-in period of 36 months.

The Pune-headquartered company is a jewellery retailer, with operations primarily in Maharashtra.

The FD scheme, which will be open for subscription from 13-30 October has been rated A+ by Care Ltd with a stable outlook.

The company had offered interest rates of 8% in 2019. This dropped to 7% in 2020, mirroring the decline of interest rates in India. However, the current rate offered is at a substantial premium to bank interest rates of 4-6.5%.

In comparison, AAA-rated HDFC company FD scheme offers 6.45% interest for tenures of 33-99 months. While AA-rated FD scheme by Shriram City Union Finance offers 7.48% interest rate for tenures of 12-60 months.

The minimum lock-in period in the scheme by P.N. Gadgil and Sons is 180 days and on any pre-maturity on or after complementation of 180 days, interest rate will be 1% less than the offer rate of 7%.

The company, meanwhile, is offering a special rate of 7.50% per annum on single deposit of 50 lakh and above.

The company is raising funds for medium-term finance, the long-term working capital requirements and for the general corporate purposes.

Listing risk factors for the FD scheme, the company that increase in gold price is always a cause for concern for the jewellery sector. This year, the covid-19 pandemic is an additional risk.

As per regulations, the company can raise up to 91.76 crore from public and up to 36.70 crore from shareholders by way of deposits. P.N. Gadgil and Sons had 14.84 crore in deposits as of 3 September.

The company runs 29 stores across Maharashtra, Gujarat, and Karnataka.

It had reported a net profit of 135.69 crore for financial year 2021 and 64.42 crore for FY20.


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