Market Linked Debentures

Structured Investing. Market Participation. With Greater Intent.

Structured debt instruments where payoff is linked to defined market conditions. Review issuer quality, payoff rules, tenure, taxation and portfolio fit before you invest.

Request an MLD review

Share a few details. Our investment team will connect for an RM-led conversation around issuer quality, payoff rules, scenario outcomes, tax impact, and portfolio fit.

MLD basics

What is a MarketLinked Debenture?

MLD offers a differentiated investment format, where returns are linked to market performance such as indices or gold, within a predefined structure, providing a distinct approach beyond traditional investments.

It has a debt security base.

It has market-linked payoff rules.

Issued by Leading Institutions

Predefined Investment Tenure & Payoff structure

Different by design

Built Around Markets, Structured Through Debt.

MLDs go beyond conventional fixed-income investing by combining the stability of a debt structure with market-linked participation through predefined investment terms.

01

Debt security base

The instrument is issued as a debenture.

02

Market-linked payoff

Payoff depends on a benchmark or defined condition.

03

Scenario-based return

Outcomes change by market scenario and term-sheet rules.

04

Hold-to-maturity design

Many structures are designed to be evaluated till maturity.

05

Early exit at market value

Exit before maturity may happen at prevailing market value, not face value.

Payoff decoder

Read the structure before you read the payoff.

The potential outcome is only one part of the story. Understanding the structure behind it can provide a clearer view of the opportunity.

Common Payout Structures

Capital Protection Structure

  • If markets remain flat or decline within limits → Principal is returned
  • If markets rise → Returns are generated as per defined participation

Accelerator Structure

  • Returns move at a higher rate than the market movement
  • Example: A 10% market rise may result in 12–15% payout

Capped Return Structure

  • Suitable for volatile or moderately bullish market conditions
  • Capped payoff structure helps manage sharp market reversal risk

Dual Outcome (Twin-Win) Structure

  • Defined minimum return visibility even during weaker market conditions
  • Potential upside participation linked to the performance of the underlying asset or index as per predefined structure

Every structure tells a different story. Find the one that fits yours.

Investor fit

Designed for Investors Seeking Structured Market Participation.

MLDs may complement the portfolios of investors looking beyond traditional debt through predefined investment structures aligned with specific market views.

01
High-Conviction Investors

Express specific market views through structured investment opportunities.

02
Portfolio Diversifiers

Complement traditional equity and debt allocations with differentiated exposure.

03
Long-Term Investors

Invest with a defined horizon aligned to the product's tenure.

04
Opportunity Seekers

Explore market-linked strategies beyond conventional investment products.

Underlying asset map

The market link decides what you must track.

Different MLDs can be linked to different underlying assets or benchmarks. Availability depends on issuer, structure and product terms.

Index-Linked MLD

Returns linked to indices like Nifty or Sensex. Structured participation in broad market movement.

Gold-Linked MLD

Returns linked to gold price movements. Exposure to commodities within defined payoff.

Stock-Linked MLD

Returns linked to individual stocks or baskets. Targeted exposure with structured outcomes.

Compare correctly

MLDs are not better than every other product. They are different.

Each product solves a different portfolio problem. The right conversation begins with role, risk, liquidity, tax and time horizon.

01

NCD (Non-Convertible Debenture)

What It Is

Debt security offering coupon payments and redemption as per issue terms.

Key Risks

Issuer risk, interest rate risk, liquidity risk, and credit risk.

Liquidity / Exit Characteristics

Liquidity depends on market availability and issue structure.

Learn More: NCD (Non-Convertible Debenture)
02

MLD (Market-Linked Debenture)

What It Is

Structured debt instrument with a market-linked payoff.

Key Risks

Issuer risk, market-linked payoff risk, liquidity risk, valuation risk, and tax risk.

Liquidity / Exit Characteristics

Typically designed to be held until maturity; early exit may be based on prevailing market value.

03

Bond

What It Is

Debt instrument issued by government or corporate entities.

Key Risks

Credit risk, duration risk, interest rate risk, and liquidity risk.

Liquidity / Exit Characteristics

Can generally be traded before maturity, subject to market liquidity.

Learn More: Bond
04

PMS (Portfolio Management Services)

What It Is

Professionally managed portfolio with market-linked performance.

Key Risks

Equity market risk, manager risk, style risk, and concentration risk.

Liquidity / Exit Characteristics

Investments can typically be redeemed, subject to portfolio liquidity and PMS terms.

Learn More: PMS (Portfolio Management Services)
05

AIF (Alternative Investment Fund)

What It Is

Privately pooled alternative investment vehicle.

Key Risks

Manager risk, liquidity risk, valuation risk, market risk, credit risk, and tax risk.

Liquidity / Exit Characteristics

Usually has longer lock-in periods and limited liquidity.

Learn More: AIF (Alternative Investment Fund)
06

Mutual Fund

What It Is

Pooled investment vehicle with NAV-based market performance.

Key Risks

Market risk, credit risk, interest rate risk, and scheme strategy risk.

Liquidity / Exit Characteristics

Generally offers periodic liquidity, depending on the scheme structure.

Learn More: Mutual Fund
Choice Wealth role

We do not begin with the product. We begin with the structure.

MLDs need more than access. They need a clear reading of issuer quality, payoff rules, tax impact, liquidity and fit with the rest of the portfolio.

Access to select MLD issuances

Subject to availability, eligibility and product terms.

Payoff structure review

Decode triggers, barriers, caps, floors and observation dates.

Issuer and rating review

Discuss issuer quality, rating details and rating date.

Scenario-based explanation

Understand how different market outcomes may affect payoff.

Portfolio-fit discussion

Review whether the instrument deserves a role in your allocation.

Documentation and execution support

Assist with required documents and process flow.

Lifecycle tracking till maturity

Keep review, maturity and action dates visible.

Structured review

Growth Deserves
Greater Balance

FAQs

Questions investors ask
before considering MLDs.

Scroll through, each answer opens on its own as you move down the list.

01What is a Market Linked Debenture?

A Market Linked Debenture is a structured debt instrument where the payoff is linked to defined market conditions such as an index, yield, gold price, stock or basket, as specified in product terms.

02How does an MLD work?

An MLD uses a term-sheet formula. The payoff depends on the underlying asset, trigger, observation date, tenure, cap or floor, issuer and redemption terms.

03Is an MLD principal protected?

Some MLDs may have principal repayment features at maturity. This is subject to product terms, issuer credit risk and holding till maturity.

04Is capital protection guaranteed in MLDs?

No blanket guarantee should be assumed. Principal repayment, where applicable, depends on issuer credit quality, product terms and maturity conditions.

05What are MLD returns linked to?

MLD payoffs may be linked to indices, G-Sec yields, gold, stocks, baskets or other defined benchmarks, subject to product terms.

06Who should consider MLDs?

Investors with meaningful portfolios, ability to understand structured payoff rules, comfort with issuer risk and capacity to hold till maturity may review MLDs.

07Who should avoid MLDs?

Investors seeking FD-like certainty, easy liquidity, simple fixed coupon products or guaranteed market-linked returns should avoid MLDs unless the structure is clearly understood.

08What is the difference between MLD and NCD?

An NCD usually has coupon and redemption terms. An MLD is a debenture where payoff is linked to defined market conditions and scenario outcomes.

09How are MLDs taxed in India?

Tax treatment should be reviewed as per applicable law. Gains from MLDs may be taxed as short-term capital gains under applicable provisions, subject to investor status and product terms.

10Can I sell an MLD before maturity?

Early exit may be possible only if liquidity is available. The exit value may depend on market value, valuation, buyer availability and product terms.