Fixed Deposits from Jai Prakash Associates

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Jaiprakash Associates, is offering attractive rates on Fixed Deposit Schemes. The company participates in Engineering & Construction, Cement, Power and Real Estate sectors.
The company offers fixed deposits with 1,2 and 3 year terms, with interest that is payable monthly, quarterly or cumulative.    Details on the various schemes are below:

NON CUMULATIVE DEPOSITS – SCHEME A : QUARTERLY INCOME PLAN

PERIOD	Min. Amount (Rs.)	Rate of Interest (% p.a.)
1 year	10,000/-	11.00
2 years	10,000/-	11.50
3 years	10,000/-	12.00

CUMULATIVE DEPOSITS
SCHEME C

Period	Min. Amount (Rs.)	Category	Payable on Maturity (Rs.)	Yield (% p.a.)
6 months	10,000/-	General Special	10, 550 10,575	11.00 11.50
1 year	10,000/-	General Special	11,157 11,213	11.57 12.13
2 years	10,000/-	General Special	12,572 12,697	12.86 13.48
3 years	10,000/-	General Special	14,308 14,522	14.36 15.07

• Special Rate : Shareholders (holding a minimum of 100 shares), employees and senior citizens can get 0.5% extra interest.
• Additional amounts, should be in multiples of Rs 1000/-.        
• Maximum amount per investor,  for 6 month FDs is limited to Rs. 10 lakhs.      
• Interest is compounded monthly on terms greater than or equal to 1 year.

Application Form and Prospectus are available for download from the company web site.  
Ratings : The credit rating for JP’s long term debt is ‘CARE A+’,  which indicates that is assigned to instruments that are considered to offer adequate safety for
timely servicing of debt obligations. Such instruments carry low credit
risk.
Company Highlights

• Participated in 54% of hydropower projects in the 10th five year plan.
• Built largest underground surface powerhouse.
• Plans to be a 32 million ton per annum cement producer by 2011.
• India’s largest private sector hydropower producer.
• Slated to be a 4270 MW power entity by 2013.
• Constructing 165 km Noida – Agra, Yamuna Expressway.
• Constructing 1047 km Noida – Ballia, Ganga Expressway.
• To develop 37 mln sq. meter of Real Estate over the next decade.
• Market capitalization of around Rs. 20,000 crores (4.15L shareholders, 27000 depositors).

Recommendation : Many of the jaypee group’s projects have a long gestation period.      Further,   the company has an interest coverage ratio of 1.77 (ie.   the total number of times a company can pay interest,    out of it’s earnings before taxes,  an interest coverage ratio greater than 1.5 is considered high.)    Invest in FDs with 1-2 year terms, to take advantage of the high interest rates.     It is likely that deposits longer than the 2 year period,  may be returned to the investors,   if the new Companies Bill is enacted.
Updates:
September 21 :  JP Associates has been awarded the Ganga Expressway project on a Build Operate Transfer basis.    The project is worth  Rs. 40000 crores.    JP has been given rights to develop properties, along the expressway.
September 25 : Given the investor interest,  the company may stop accepting fixed deposits or close some of the schemes.
October 1:  The company has closed the Monthly Income Plan.        Investors,   looking for interest at monthly intervals,  should look for other companies.
October 12:  Our analysis indicates that the jaypee’s FD scheme has generated tremendous investor interest.     The company may either stop accepting fixed deposits or reduce the interest rates, in the near future.   The company has previously closed the monthly interest option.
November 20:  The company is currently dispatching FD certificates and interest warrants,  for applicants,   who submitted their applications in the first week of September.   Plan on a wait time of atleast 2.5 months,  to receive your interest warrants.
November 21:  Contact numbers for JP Associates : (0120) 460-9000, (0120) 9700-9800.
December 4: The company shall stop accepting deposits from the general public,   from January 7th.    Shareholders (holding  100 shares or more) can continue to send in their applications.