Important Things To Know About Market-Linked Debentures In India
Market Linked Debentures in India are a growth story backed by a robust Government policy and philosophy. Listed from the past few years, here are some essential things you need to know about Market Linked Debentures in India. What is a Market Linked Debenture? A market-linked debenture is a type of debt instrument that is linked to the performance of a specified market index. The movements of the market index determine the interest rate on the debenture, typically either the S&P BSE SENSEX or NIFTY 50. The principal amount of the debenture is repaid at maturity, regardless of the Index value at that time. In exchange for this certainty, investors in market-linked debentures typically receive lower interest payments than those on comparable fixed-rate instruments. Market-linked debentures can be issued with maturities ranging from 1 year to 10 years. They are typically given in the dematerialized form and are traded on secondary markets like other debt securities. Investors s