New Delhi, Sep 8: India’s debt market has taken a significant step towards digital transformation with REC Limited successfully issuing the country’s first pilot tokenised corporate bond under the Securities and Exchange Board of India’s (SEBI) Regulatory Sandbox Framework.
REC raised Rs 500 crore through the issue, which attracted bids worth around Rs 796 crore, reflecting strong investor interest in the new digital format. The bonds carry a 7.30 per cent annual coupon and have a tenure of one year and nine months. The issue also enabled pay-in, allotment and listing on the same day.
In simple terms, a tokenised bond is a regular debt security whose ownership and transaction records are maintained digitally using blockchain or distributed-ledger technology. The objective is to make the process of issuing, transferring and settling securities faster and more efficient.
The REC transaction is important because it demonstrates how traditional financial products can work with new digital infrastructure. Faster settlement could reduce operational delays and make transactions easier to track, while digital records can improve transparency across the transaction chain.
The pilot also gives regulators and financial institutions an opportunity to understand how tokenised securities perform in a controlled environment. Since the transaction was conducted under SEBI’s regulatory sandbox, the technology can be tested while maintaining regulatory oversight.
For the wider financial sector, the development could open the door to a more technology-driven bond market. Banks, financial institutions and companies could eventually use tokenised securities to streamline fundraising and settlement, potentially reducing administrative work and transaction-related costs.
The strong response to REC’s issue also suggests that investors and financial institutions are willing to explore new forms of digital securities. REC received bids of around Rs 796 crore against the Rs 500 crore issue, highlighting early market interest.
The development is already attracting attention from other corporate issuers. Larsen & Toubro is reportedly planning a tokenised bond issue of up to Rs 500 crore, indicating that REC’s pilot could encourage other companies to explore the technology.
However, tokenised bonds are still at an early stage in India. Wider adoption will depend on how the technology performs on security, scalability, regulatory compliance and secondary-market trading.
REC’s first-mover initiative nevertheless marks an important milestone for India’s capital markets. If the model proves successful, tokenisation could gradually make corporate bond transactions faster, more transparent and more efficient, strengthening the country’s broader push towards digital finance.