An Investor’s Guide to Market Linked Debentures in India

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The market has given you the opportunity to invest in both stocks and bonds, but there may be one thing missing- Market linked debentures. It offers investors two unique opportunities, but it comes with its own set of risks and rewards that differ from traditional options like stocks and bonds. Before you jump into this type of investment, be sure to read this investor’s guide to market-linked debentures in India. Many investors may have heard of market-linked debentures and asked the question, what are market-linked debentures? This article will explain exactly what marketlinked debentures are as well as where to find them in India as an investment opportunity. It will also go over the features of the same and how they can benefit you as an investor. So, let’s get started! What are MLDs? Market Linked Debentures (MLD) are the fixed income instruments, regulated by SEBI, whose returns are linked to either a particular security or market Index such as government security, gold index fund, or Nifty Index fund, etc. Majorly there are two types of Market Linked DebenturesPrincipal Protected Non-Principal Protected How do they work? For example, XYZ Company issues MLD @10% p.a coupon maturing in 16 months. The coupon is paid only on condition that the Nifty Index does not fall more than 25%. If the index falls more than 25% then only the principal is returned (No interest is paid). This is an example of a principal-protected MLD.


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An Investor’s Guide to Market Linked Debentures in India by The Fixed Income - Issuu