Market-linked debentures (MLDs): 5 things you should know

1.MLDs are nonconvertible debentures whose returns are not fixed but linked to an underlying market index.
2.The underlying index could be equity benchmark, government yield, gold index, etc.
3.The tenure for MLDs typically ranges from 12 to 60 months.
4. MLDs Carry credit risk and liquidity risk.
5.The capital gains on listed MLDs are taxed at 10% for a holding period of one year or more. However, from 1 April 2023, both listed and unlisted MLDs will be taxed at slab rate.


Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.