Market Linked Debentures

A Market Linked Debenture (MLD) is a type of debt instrument where the returns are linked to the performance of a specific market index, such as the Nifty 50 or Sensex, or to other financial indicators like interest rates or commodity prices. Unlike traditional fixed-income instruments that offer a fixed interest rate, MLDs provide returns that vary based on the underlying index or benchmark’s performance. While they offer the potential for higher returns, the actual payout can fluctuate, making them a hybrid investment combining elements of both debt and equity. MLDs are generally considered to be less risky than direct equity investments but carry more risk than traditional fixed deposits.

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