Understand the Structure Before You Commit.
Non-Convertible Debentures (NCDs) and Market Linked Debentures (MLDs) are debt securities issued by companies and financial institutions. They differ significantly in how returns are determined and in the risks involved.
NCD vs MLD
- NCD — A debt security that typically pays interest at a stated rate and repays principal at maturity. It may be secured or unsecured, and listed or unlisted.
- MLD — A debt security whose returns are linked to the performance of an underlying, such as an equity index. The payoff can be complex, and depending on the structure the principal may or may not be protected.
Key Risks
- Credit risk of the issuer
- Limited liquidity, as exiting before maturity may be difficult
- Structure complexity: read the term sheet for payoff conditions, caps and barriers
- Rating changes during the tenure
- Taxation as per applicable law
How VALUE ADDITION Helps
We help you understand how each instrument works, read the rating and offer documents, and decide whether the structure and risk are right for you before you commit.
Important note
All investments carry risk, including the possible loss of capital, and returns are not guaranteed. Availability depends on eligibility and applicable regulations. This page is general educational information, not investment advice or a recommendation. We do not provide SEBI registered investment advisory or portfolio management services.