Market Linked Debentures
MLDs, explained.
A bond whose return follows the market. Here is how it works, what it pays, and what can go wrong.
For education only. Not investment advice, an offer or a solicitation.
A Market Linked Debenture is a bond whose return is tied to a market index - like the Nifty 50 - instead of paying a fixed rate of interest. You lend money to the issuer for a set term; what you earn at the end follows a formula that is agreed and written down before you invest.
See exactly how an MLD pays off
Pick a shape, then drag where the Nifty lands in about 3.5 years. Watch what your ₹10,00,000 becomes.
Illustrative only. Payoff shapes follow the structures these MLDs actually use, but the entry level shown is a placeholder and the exact caps, floors, participation and terms differ for every offering and are set out in its term sheet. Principal protection, where shown, is to face value and subject to the issuer's credit. Nothing here is an offer, a recommendation, or a promise of returns.
One tool among several
Roughly from the most everyday to the most specialised.
Mutual Funds
Pooled, professionally managed, highly liquid. The everyday core of most portfolios.
MLDs
A bond with a market-linked payoff, fixed by formula up front. A structured diversifier.
PMS
A portfolio of stocks held in your own name and managed for you.
AIFs
A pooled private fund reaching strategies beyond the public market.
Minimums are indicative and set by SEBI or the product, not by us. See PMS & AIFs explained
What can go wrong
The market must show up
Your return needs the Nifty to do what the formula needs. If it does not, a protected MLD hands your money back if the issuer pays, but little or nothing more.
The issuer must stay solvent
You rely on the issuer's promise to pay. It is not a bank guarantee and not government insured. This is the risk that matters most, so we read the issuer’s credit rating first.
The anatomy of an MLD
- Tenor
- Typically 3 to 4 years
- Underlying
- A market index, e.g. Nifty 50
- Payoff
- Fixed by formula, up front
- Protection
- Where offered, to face value, subject to issuer credit
- Backed by
- The issuer, not a bank
- Liquidity
- Best held to maturity
Who it is for: investors who want defined, rules-based market exposure, can hold to maturity, and want it explained before they commit.
Want the current offerings, or just want it explained?
Current offerings are shared one to one, never broadcast.
MLD payoffs depend on the performance of underlying instruments and on issuer solvency. Principal protection, where offered, is to the extent of face value and subject to the issuer's credit. There are no guaranteed or assured returns. The shapes shown are illustrative and not based on any specific offering. Read all product documents carefully before investing. BrokerBriefs is a distributor of financial products, not a SEBI-registered investment adviser; this page is educational, not personalised advice or a solicitation.