Market linked Debentures

Market Linked Debentures (MLDs) are debt instruments where the returns are linked to a market index—such as Nifty, Sensex, government bond yields, or other benchmarks.

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They are issued by NBFCs or financial institutions and offer a combination of capital protection + market-linked growth depending on the product structure.

Key Features of MLDs

1. Market-Linked Returns

Unlike traditional fixed deposits or normal debentures, MLD returns depend on the performance of an underlying index.

Example: A structured MLD may say “10% return if Nifty stays above a certain level”.

2. Capital Protection (Varies by Product Type)

Principal-protected MLDs

Your invested amount is returned regardless of market movement.

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Non-principal-protected MLDs

Both returns and capital may vary based on market performance.

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3. Fixed Tenure

MLDs usually come with a tenure of 12 months to 5 years, depending on the issuer and structure.

4. Customizable Structures

They can be designed with triggers such as:

This makes MLDs a part of the structured product category.