Investment Products
Structured Products
Investment options whose returns are linked to underlying assets such as market indices or shares, built with specific return conditions and risk levels.
Understanding the basics
What are structured products?
Structured products are pre-packaged investments whose returns are linked to the performance of an underlying asset — such as a stock market index, a basket of shares or other financial instruments. Instead of simply rising and falling with the market, they pay out according to a formula that is fixed at the time of investment.
In India they are commonly issued as market-linked debentures (MLDs) by NBFCs and financial institutions, and are typically offered to high-net-worth and sophisticated investors. Each product has a defined tenure, a defined underlying and defined payout conditions.
Because the payout depends on those conditions, two products linked to the same index can behave very differently. That is why understanding the structure matters more than the headline return.
How It Works
From launch to maturity.
Every structured product follows the same basic life cycle — the details of each step are what make one product different from another.
Terms are fixed
At launch, the issuer sets the underlying, tenure, participation rate, any cap or barrier, and the level of capital protection, if any.
You invest
You invest for the full tenure — commonly between one and five years. Early exit, if available, depends on secondary-market liquidity.
The underlying is tracked
The underlying index or shares are observed on pre-defined dates. Only those observation points count toward your payout.
Payout at maturity
At maturity (or on an early-redemption trigger), you receive the amount the formula produces — which may be more, the same, or less than you invested.
Illustrative Scenarios
What happens when markets move?
A simplified view of how typical structures respond. Actual outcomes depend entirely on each product’s terms.
If the market rises
You participate in the gain according to the participation rate — for example, 80% or 120% of the index’s rise. Many structures cap the maximum return, so a very strong rally may not be fully reflected.
If the market stays flat
Outcomes vary by design. Some range-bound structures pay a fixed coupon if the index stays within a band; others return only the principal (if protected), meaning no real return after inflation.
If the market falls
In capital-protection oriented structures, principal is returned at maturity — subject to the issuer’s ability to pay. In non-protected structures, you can lose part or all of your capital, especially if a barrier is breached.
Illustrations are for understanding only and do not represent any specific product, return or guarantee.
Common Types
Four structures you are likely to see.
Names vary between issuers, but most products in the market are built on one of these designs — or a combination of them.
01
Capital-protection oriented
Designed to return the principal at maturity, with upside linked to the market. Protection holds only if you stay invested to maturity and the issuer is able to pay.
Lower risk · Lower potential upside
02
Participation structures
Offer a share of the underlying’s rise — sometimes above 100% — often in exchange for a cap on returns or partial / no protection of principal.
Market-linked upside
03
Range-bound / income
Pay a pre-defined coupon if the underlying stays within a set range during the tenure. Returns can be lower if the range is broken.
Suited to sideways markets
04
Autocallable
Redeem early with a fixed payoff if the underlying is at or above a trigger level on an observation date; otherwise continue to the next date or maturity.
Defined early-exit triggers
Suitability
Is a structured product right for you?
Structured products work best as one part of a diversified portfolio — not as a replacement for it. We assess suitability against your goals, time horizon and risk appetite before recommending any product.
May suit you if
- You have a clear view on how markets may move
- You can stay invested for the full tenure
- You want defined, scenario-based outcomes
- You already hold a diversified core portfolio
- You understand and accept issuer credit risk
May not suit you if
- You may need the money before maturity
- You need guaranteed or regular income
- You are not comfortable with complex terms
- This would be most of your investable wealth
- You cannot accept any loss of capital
How Brihanta Helps
Clarity at every step of the decision.
01
Product Understanding
Explain the product structure, features, and return conditions in simple words.
02
Investment Opportunities
Help you explore suitable structured products based on your financial needs.
03
Risk Assessment
Explain the possibility of losses, market risks, and capital protection conditions, if any.
04
Return Analysis
Help you understand how returns may vary under different market conditions.
05
Personalized Guidance
Help you assess whether a product fits your investment objectives and time horizon.
Before You Invest
Six questions to ask about any structured product.
Clear answers to these questions tell you most of what you need to know. If any answer is unclear, that is a reason to pause.
01Is my capital really protected?
Only in capital-protection oriented structures, only if you hold to maturity, and only to the extent the issuer is able to pay. Protection is a feature of the product’s terms — it is not a guarantee from a regulator or government.
02Who is the issuer, and what is its credit rating?
The issuer is the institution that owes you the payout. Its credit rating and financial strength matter as much as the market view. We review both before shortlisting a product.
03Can I exit before maturity?
Some products are listed or offer buy-back windows, but liquidity is often limited and early exit may be at a discount. Plan to hold for the full tenure.
04How exactly is my return calculated?
Look for the participation rate, any cap, barrier or knock-out level, the observation dates, and whether averaging is used. We walk you through the payout table for each scenario.
05What costs are built into the product?
Structuring and distribution costs are usually embedded in the terms rather than charged separately. Ask how they affect the participation rate or protection level.
06How will my returns be taxed?
It depends on the structure and current tax law. Market-linked debentures are currently taxed as short-term capital gains regardless of holding period. Please consult your tax advisor for your situation.