Market Linked Debentures
Equity-linked growth with a defined payoff — choose a principal-protected structure with a fixed floor, or a growth structure with accelerated upside. Returns and principal are subject to market and issuer credit risk.
What is a Market Linked Debenture?
An MLD is a debt security whose return is tied to the performance of a market index — most commonly the Nifty 50 — instead of paying a fixed coupon. They come in two broad structures: a principal-protected design that returns your capital plus a fixed floor even if the index falls, and a growth design that accelerates your upside but leaves capital exposed on the downside. In both, the structure depends on the issuer's credit — it is not a regulatory guarantee. MLDs are high-ticket, fixed-tenure instruments meant to be held to maturity.
Two structures — drag, model, and compare live
Drag on the chart, jump to a scenario, toggle after-tax, or open desk mode to model a live tranche's exact terms. Hypothetical illustrations of the structure — not forecasts.
Principal-Protected MLD
You get the higher of a fixed floor or the Nifty's return. The shaded wedge is the protection you keep when the market falls.
The trade-off, plainly: Protected caps your downside at the fixed floor (≈6.0% p.a. here) but trails on a strong rally; Growth leads in a bull run at 1.45× but takes the full fall. All figures are illustrative over a 3.5-year tenure — always confirm the exact floor and participation against the live term sheet.
Key characteristics
Market-Linked Upside
Returns linked to an index such as the Nifty 50 — participate in the upside instead of settling for a flat coupon.
Principal Protection*
Select tranches return your principal plus a fixed floor even if the index falls. A structural feature, subject to issuer credit risk — not every structure protects capital.
AAA-Rated Issuers
We curate tranches from highly-rated issuers only, selected for credit strength and reliability.
Defined Tenure & Payoff
Fixed 3–5 years terms with a clearly defined payoff formula known upfront at maturity.
Portfolio Diversification
A defined-outcome instrument that sits between pure equity and plain debt in an HNI allocation.
For Eligible HNI Investors
High-ticket instruments suited to HNI and Ultra-HNI investors who can hold to maturity.
* Principal protection, where offered, is subject to the issuer's credit risk. It is not a guarantee by GRM Wealth or any regulator, and is not available in growth (non-protected) structures.
Protected vs growth vs direct index
Where each structure helps and where it doesn't — shown straight, so you can decide what fits your allocation.
| Factor | Direct Index | Protected MLD | Growth MLD |
|---|---|---|---|
| If the market falls | Full market loss | Principal + fixed return* | Full market loss |
| Upside participation | 100% of gains | 100% above the floor | 145%, uncapped* |
| Minimum at maturity | None — can lose capital | ≈6% p.a. floor* | None — capital at risk |
| Outcome at maturity | Fully variable | Floor + Nifty upside | 1.45× Nifty, defined |
| Key risk | Market risk | Issuer credit risk | Issuer credit + market |
| Tenure | Open-ended | Fixed (3–5 years) | Fixed (3–5 years) |
| Liquidity | High (daily) | Low (to maturity) | Low (to maturity) |
| Taxation | LTCG 12.5% (>1 yr) | Slab — Sec 50AA | Slab — Sec 50AA |
How MLDs are taxed today
Since 1 April 2023, Section 50AA taxes all gains from MLDs as short-term capital gains at your applicable income-tax slab rate, regardless of how long you hold. The earlier 10% long-term treatment no longer applies.
- No indexation benefit is available, on any holding period.
- No grandfathering — this applies even to MLDs bought before April 2023 if redeemed or matured on or after that date.
- TDS may apply on payouts, and STT paid is not deductible against the gain.
- For investors in the highest bracket, the effective rate can exceed 35% including surcharge and cess — so evaluate MLDs on post-tax return and structure, not on tax efficiency.
This is general information, not tax advice. Tax treatment depends on your individual circumstances and may change. Please consult your tax advisor.
Risk factors & disclosures
Credit / issuer risk
Repayment of principal and returns depends entirely on the issuer's ability to pay. It is not guaranteed by GRM Wealth or by any regulator.
Market risk
Returns are linked to an underlying index. In a growth (non-protected) structure, a fall in the index passes through to your capital one-for-one.
Protection is conditional, not absolute
Principal protection, where offered, is a structural feature of that specific tranche, subject to issuer credit. It is not regulator-guaranteed, and exiting early can still result in a loss.
Liquidity risk
The secondary market for MLDs is thin. Be prepared to hold the instrument until maturity.
No assured returns
MLDs do not offer guaranteed, assured or fixed returns of any kind unless explicitly stated in the term sheet.
Not a bank deposit
MLDs are market instruments. They are not bank deposits and are not covered by deposit insurance (DICGC).
Who should consider an MLD?
MLDs are suited to HNI and Ultra-HNI investors who can lock in capital for the full tenure and are comfortable with issuer credit risk. A principal-protected structure fits investors who want index-linked upside without risking capital; a growth structure fits those who can take direct-equity-level losses in exchange for accelerated upside. Investors in higher tax brackets should assess returns on a post-tax basis under Section 50AA. MLDs are not appropriate for investors who may need liquidity before maturity or who are seeking assured or guaranteed returns.
MLDs, answered plainly
Explore live MLD tranches
Our structured-products desk will walk you through current issues, payoff terms and credit profiles matched to your risk appetite — no obligation.
Market Linked Debentures are subject to market and credit risk. This page is for general information only and is not investment, legal or tax advice, nor an offer or solicitation to buy or sell any security. All illustrations and modelled figures are hypothetical, assume the entered structure, and are not a forecast or guarantee; past performance does not indicate future results. Any principal protection or floor feature is subject to the issuer's credit and the specific product terms, and is not guaranteed by GRM Wealth or any regulator. Growth (non-protected) structures carry full downside market risk. MLDs are not bank deposits and are not insured. Returns are not assured. Please read the issuer's information memorandum, term sheet and all related documents carefully before investing. [GRM Wealth acts as a distributor/intermediary for MLDs — confirm the exact regulatory disclosure, entity name, registration/ARN and any commission disclosure with your compliance team before publishing.]