A real-world story of how this Market Linked Debenture (MLD) played out over 3.3 years
In January 2022, InCred Financial Services launched a Market Linked Debenture (MLD) that was linked to the NIFTY 50 index. The offer was simple:
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100% Principal Protection
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1.25x the upside of NIFTY 50 at maturity
At a time of rising uncertainty, this structure promised both peace of mind and equity-linked returns.
Let’s break down how it actually performed — and why it worked well for investors.
The Structure at a Glance:
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Issuer: InCred Financial Services
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Payoff: 125% of NIFTY 50 returns
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Principal Protection: Yes (no downside risk)
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Allotment Date: 19-Jan-2022
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Maturity Date: 8-May-2025
A Rocky Start: NIFTY Fell Right After Launch
Just weeks after launch, global events shook markets:
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Russia invaded Ukraine (Feb 24, 2022)
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Oil spiked above $100/barrel
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Inflation worries rose
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The US Fed signaled rate hikes
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FIIs pulled out of Indian equities
The NIFTY 50 dropped from 18,000 to 16,300 in just over a month.
But this MLD used averaging — not just one day’s data — to determine entry level.
Initial NIFTY Observations:
| Date | NIFTY Level |
| 19-Jan-2022 | 18,000 |
| 24-Feb-2022 | 16,300 |
| 31-Mar-2022 | 17,500 |
Initial Level (Average): 17,267
This structure reduced the impact of short-term panic.
NIFTY 50: A Volatile Journey (2020–24)
From 2022 to early 2024, the market remained uncertain:
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Recession fears
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Rate hikes globally
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War, inflation, elections
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Budget speculations
Through all of this, those holding this MLD had one key advantage:
Their principal was 100% protected.
That’s a strong reason to stay invested during tough times.
The End Game: Where Did NIFTY Land?
By late 2024, the market had rallied — then cooled:
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Rate cuts delayed
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Profit booking by FIIs
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Budget caution
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Valuations stretched
Still, the NIFTY 50 ended higher than where it began.
Final NIFTY Observations:
| Date | NIFTY Level |
| 28-Nov-2024 | 23,914 |
| 26-Dec-2024 | 23,750 |
| 30-Jan-2025 | 23,249 |
Final Level (Average): 23,638
Performance Comparison
Let’s see how this MLD stacked up against direct NIFTY investment:
| Particulars | Entry Level | Exit Level | Absolute Returns | CAGR |
| NIFTY (single buy & hold) | 18,000 | 23,250 | 29.20% | 8.10% |
| NIFTY (avg like MLD) | 17,267 | 23,638 | 36.90% | 10.00% |
| MLD (125% of NIFTY returns) | 17,267 | 23,638 | 46.10% | 12.20% |
What This Tells Us
- Averaging Works
The structure smoothed entry and exit — shielding investors from bad timing. - Volatility Is Part of the Game
Markets dipped due to macro shocks. But recovery followed. - MLDs Promote Discipline
When your capital is protected, it’s easier to stay calm — and stay invested. - Better Risk-Adjusted Returns
Even in a volatile phase, this MLD gave a 46% return — outperforming NIFTY due to its 1.25x multiplier.
Final Thought: The Power of Structure
In simple terms:
Principal Protection + 125% of Upside + Averaged Entry/Exit
= A Better Way to Stay Invested
Disclaimer: This blog is for educational purposes only. It is not intended to offer, promote, or sell Market Linked Debentures (MLDs) or any other financial products.
