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.
They are issued by NBFCs or financial institutions and offer a combination of capital protection + market-linked growth depending on the product structure.
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”.
MLDs usually come with a tenure of 12 months to 5 years, depending on the issuer and structure.
They can be designed with triggers such as:
This makes MLDs a part of the structured product category.