How to beat depressed debt returns via market-linked debentures?
An MLD is a type of debenture that does not pay any coupon before maturity.
Synopsis
"Wealthy investors are now looking short term as the interest rate cycle will likely turn after 12-18 months," said Ajay Manglunia, head of debt capital market at JM Financial. “MLDs are gaining popularity in this environment as the absolute returns would be rewarding after factoring in the long-term capital gain tax."
MUMBAI: Debt returns have been rather depressed, with rates plunging to record lows. So, how does one earn more from this asset class – at least more than the headline inflation rate? One way to do this is to buy into MLDs (market-linked debentures), now offered by the likes of Piramal Finance or Shriram Transport Finance.
They aren’t alone in selling these. TPG-backed Five Star Financial and the IIFL Group have also been selling MLDs, which
