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Market Linked Debentures (MLDs) are instruments that combine debt securities with any market-linked product. They are a form of Non-convertible Debentures (NCDs) where the return depends on the underlying asset linked, like equity index (such as Nifty or Sensex), gold, commodity, or similar others.
The main feature of MLDs is that the payouts are linked to the conditions, and they vary across the issuer. For instance, if the Nifty 50 returns are more than 5%, the investor gets 10-15% additional payouts. However, if the same index underperforms by less than 5%, you receive principal assurance or a portion of it. Yet, these conditions depend on the issuer and the type of MLD issued.
Earning potential in MLDs depends on the performance of an underlying asset (like Nifty, Sensex, gold, etc.). Hence, the potential for returns is higher than traditional debt products.
They blend features of debt and equity (or any market product), which adds a structured product with controlled exposure to market movements.
At Anand Rathi Preferred, MLDs are not just a product but a catalyst for integrating different underlying assets with debentures. With every selection, we prioritize your goals and end expectations.
AR Preferred stands among the largest issuers and providers of Market-Linked Debentures in India, offering investors access to a wide category of structured products backed by trusted institutions.
With over 30 years of expertise in MLDs and fixed-income solutions, AR Preferred has built trust, transparency, and consistent performance in the market, making it a preferred choice among investors.
We go beyond distribution. Our in-house research team evaluates every MLD issuer and structure to ensure that only the most reliable, compliant, and performance-driven products reach our clients.
At AR Preferred, we partner with multiple top issuers, evaluate their offerings, and bring the best MLD opportunities for you.
Market-Linked Debentures are structured debt instruments issued by NBFCs or financial institutions regulated by SEBI.
MLDs are issued by SEBI-registered entities (typically large NBFCs, PSUs, or corporates) through a private placement or public issue route. But they need to obtain approval from the directors, creditors, and shareholders.
Each MLD is then linked to an underlying benchmark such as Nifty 50, Sensex, gold, commodity, G-secs, or similar securities. In short, the performance of this benchmark determines the investor's return at maturity.
Before launch, issuers define the structure and payoff conditions.
For example, if the Nifty 50 stays above a certain level, investors earn 10%. Likewise, if it falls below, they receive only the principal. This predefined formula gives investors clarity and transparency on their investment.
Every MLD carries a credit rating and hence must comply with SEBI's disclosure norms, including details of risk, payoff mechanism, and issuer financials.
On maturity, the issuer pays back the principal plus any market-linked return to the investor, depending on how the benchmark performed during the period.
Investors seeking better-than-FD or safer returns, but aren't ready to take full equity risk.
Ideal for those who prefer capital protection with market-linked growth.
Those looking for exposure to different market securities, not keen on volatility.
Investors who can stay invested till maturity (typically 1 to 5 years) to unlock the product's full potential.
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Answers to Common Questions About MLDs
Market linked debentures (MLDs) are instruments like regular debentures. Still, their returns are related to the performance of a market index, stock, commodity, or bond yield.
Unlike standard debentures that pay fixed interest, MLDs give you market-linked growth potential at maturity while still offering options for capital protection.