Market Linked Debenture (MLD)

Market-Linked Debentures (MLDs)- a blend of fixed-income instruments with the opportunity for increased returns tied to equity market performance. These structured investment products strike a balance between risk and reward, enabling you to potentially benefit from market gains while receiving regular coupon payments, providing an added layer of security. Unlike a regular bond that pays a fixed interest rate (coupon), the returns on an MLD are tied to the performance of an underlying market index, such as the Nifty 50, Gold.

Key Features of MLDs:

No Periodic Interest: Most MLDs are “Zero Coupon” bonds. They do not pay monthly or annual interest; instead, you receive a single lump-sum payment (Principal + Market Gains) at the end of the tenure.
Tenure: Typically ranges from 1 to 5 years.
Credit Rating: Like any other corporate bond, MLDs are rated by agencies (like CRISIL or ICRA). This rating tells you the likelihood of the company paying you back.
Capital Protection: Many MLDs are “Principal Protected.” This means even if the stock market crashes, the issuer guarantees to return at least your original investment at maturity
Potential for Higher Returns: If the market performs well, MLDs can offer significantly higher returns than traditional Fixed Deposits (FDs) or standard bonds.
Portfolio Diversification: They allow you to gain exposure to the equity or commodity markets without the high volatility of direct investing.

Our MLD Partner– Nuvama Wealth Management Limited (formerly Edelweiss Securities Limited)

Market Linked Debenture (MLD)

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