A real-world story of how this Market Linked Debenture (MLD) played out over 3.3 years
In June 2021, IFSL (InCred Financial Services Ltd) launched a Market Linked Debenture (MLD) linked to the NIFTY 50 index. The offer was clear:
- 100% Principal Protection
- 1.3x the upside of NIFTY 50 at maturity
At a time of uncertainty, this structure promised both safety and growth potential.
Let’s see how it performed and why it worked out well for investors.
The Structure at a Glance
- Issuer: InCred Financial Services Ltd (IFSL)
- Payoff: 130% of NIFTY 50 returns
- Principal Protection: Yes (capital safe at maturity)
- Allotment Date: 1-Jun-2021
- Maturity Date: 4-Oct-2024
A Choppy Start: NIFTY Struggled Early On
Right after the MLD launched, volatility picked up:
- Global inflation fears
- Rate hike concerns
- Early signs of geopolitical tensions
Initial NIFTY observations captured both highs and lows:
Initial NIFTY Observations
| Date | NIFTY Level |
| 01-Jun-2021 | 15,600 |
| 24-Jun-2021 | 15,800 |
| 29-Jul-2021 | 15,800 |
| Initial Level (Average) | 15,733 |
This averaging helped smooth out short-term swings.
Market Journey: 2022–2024
2022: The Russia–Ukraine war, oil spiking above $100, and US Fed rate hikes rattled markets. Many retail investors panicked and exited.
2023: Sentiment improved. Strong domestic demand, government spending, and corporate earnings lifted NIFTY. Despite global uncertainty, India became a bright spot.
2024: A weak yen and rising US bond yields triggered FII outflows, weighing on markets. But domestic inflows kept things stable, and NIFTY held firm at higher levels.
The End Game: NIFTY Finishes Strong
By late 2023 and mid-2024, NIFTY had rallied well:
Final NIFTY Observations
| Date | NIFTY Level |
| 28-Dec-2023 | 21,800 |
| 27-Jun-2024 | 24,100 |
| Final Level (Average) | 22,950 |
Performance Comparison
Here’s how the numbers stacked up:
| Particulars | Entry | Exit | Absolute | CAGR |
| NIFTY 50 (single Entry & Exit) | 15,600 | 24,100 | 54.50% | 13.90% |
| NIFTY 50 (Entry & Exit similar to MLD) | 15,733 | 22,950 | 45.90% | 11.90% |
| 1.3x MLD | 15,733 | 22,950 | 59.60% | 15.00% |
What This Tells Us
- Averaging Works: Spreading entry across dates avoided the risk of bad timing.
- Volatility Is Normal: War, inflation, and rate hikes shook markets, but recovery followed.
- MLDs Encourage Discipline: Knowing capital was protected made it easier to stay invested.
- Smarter Returns: The 1.3x multiplier gave investors a 60% gain, better than NIFTY itself.
Final Thought: Smarter Investing with Structure
In simple terms:
Principal Protection + 130% of Upside + Averaged Entry/Exit
= A better way to stay invested through volatile markets
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.
