How to buy Market Linked Debentures?
I thought the entire meaning of debenture is that it’s bond/debt instrument?
But seems link MLDs exist. https://www.incredmoney.com/market-linked-debentures/mld1/details/
Very curious if they are successful, and mainly how they work. How is InCred promising 1.5x Nifty returns that too with no loss of principle. It is also giving a guarantee of minimum returns
Looks like the returns are for 2 years, so per year min is 7% and max 15%.
When originally conceived, that was the meaning. MLD was started as debenture giving fixed returns but with a variable clause. Something like:
This debenture will give 8% pa return but if nifty falls by 50% then it will give 0 return.
Now chance of nifty falling by 50% is almost zero so high probability you will end up with 8% pa.
However, since return were designed as variable linked to nifty (or some other index) now it is no longer a debt prduct, but equity product, and it get better taxation compared to straight debt product. And hence it was very popular amongst HNI.
However, this all changed when one of the recent budget closed this loophole and now they get taxed as it should be so popularity has reduced.
What you have linked here is second generation of MLD, and is basically a derivative product, which is gaining popularity with HNI now.
By investing in derivative. A simple approach would be to invest a part of money in debt so you get a fixed return and put small remaining portion to buy an Nifty option which would give desired upside linked to nifty.
Again this is too simple, actual logic could be bit more complex.
Edit: just saw, they have a good chart explaining it already 
below article can give more idea bout both:
What is the future of ‘Market Linked Debentures’ industry? Invest in MLD to outperform Nifty50 - CaFE Invest News | The Financial Express
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Yea, but the incred MLD seems kind of misleading. I am hoping for something that better mirrors the index, a cap at 15% per year is rather lacking.