Market-Linked Debentures are instruments that do not have a fixed pay-off. Instead, their payoff depends upon the performance of another index like Nifty 50 or security like the 10-year G-sec. Upon maturity, a payoff or return payable is accrued along with the initial principal payment. This return payable is dependent on the movement of the underlying index or security that the Market-Linked Debentures follows, as initially defined in the terms. For instance, if the terms of investment state that 80 percent of the upward movement of the index is payable, then a 20 percent rise in the index would reap a payoff of 16 percent over the tenure of the MLD. 

Market-Linked Debentures are instruments that do not have a fixed pay-off. Instead, their payoff depends upon the performance of another index like Nifty 50 or security like the 10-year G-sec. Upon maturity, a payoff or return payable is accrued along with the initial principal payment. This return payable is dependent on the movement of the underlying index or security that the Market-Linked Debentures follows, as initially defined in the terms. For instance, if the terms of investment state that 80 percent of the upward movement of the index is payable, then a 20 percent rise in the index would reap a payoff of 16 percent over the tenure of the MLD.