REC’s successful issuance of ₹500 crore through India’s first tokenised corporate bond pilot signals a potential shift towards faster, more transparent bond trading using blockchain technology, with institutional investors leading the way.
REC has completed India’s first tokenised corporate bond sale, raising ₹500 crore on Monday, 7 September 2026, after drawing bids worth ₹796 crore in a tightly controlled pilot that settled through the Reserve Bank of India’s digital rupee. The 7.30% issue gives India its first completed test of blockchain-based corporate debt infrastructure and suggests there is already institutional appetite for a format regulators hope will eventually make bond dealing quicker and easier.
Even before the bonds were sold, reports suggested the project could alter only part of the market’s machinery rather than replace it outright. Business Standard said Sebi’s proposed Demat 2.0 framework would allow the standard electronic book mechanism to handle private placement and allotment, with holdings then moving to a distributed-ledger securities wallet. That differed from Reuters’ earlier reporting, carried by India Today and MarketScreener, that the securities would avoid the conventional electronic book provider platform. What both versions agreed on was that the initiative was being developed jointly by the Securities and Exchange Board of India and the Reserve Bank of India, with the two depositories’ technology teams working on the new rails around this week’s Global Fintech Fest in Mumbai.
The REC notes mature on 31 May 2028, giving them a tenor of about one year and nine months. Mint and the Financial Express reported that the final ₹500 crore consisted of a ₹100 crore base issue and a ₹400 crore greenshoe. Bloomberg, in a report carried by Moneycontrol, said about 20 investors took part, spanning banks, mutual funds and companies. It named HDFC Bank, ICICI Bank, Axis Bank and Yes Bank among buyers, along with AK Capital Services, ICICI Securities Primary Dealership, Taurus Group and Trust Investment Advisors. HDFC Bank said it had arranged the issue but did not say whether it had also bought the paper.
The pilot is still some distance from a retail launch. Reuters reported in August that the sale would be restricted to a select group of investors and would require two digital wallets: a wholesale central bank digital currency wallet supplied through a bank for payment, and a securities wallet for the bonds themselves. Business Standard said those post-allotment holdings would sit in Demat 2.0, which records positions on distributed-ledger technology instead of the conventional depository ledger. The paper also said investors might not need a second demat account or a separate know-your-customer process, although a CBDC wallet linked to a bank account would still be required for settlement.
Supporters of the model say the appeal is speed rather than spectacle. Amar Gandhi, founder and managing director of Taurus Group, told Bloomberg that the biggest gain was “speed and settlement efficiency”. In REC’s release, cited by the Financial Express, finance director Rajesh Kumar said tokenisation and Demat 2.0 were “a landmark step in the evolution of India’s debt markets”. Business Standard reported that coupon and redemption payments could eventually be automated through smart contracts, while the existing trading infrastructure and investor safeguards are largely left in place. The same report said REC was seen as a suitable test case because it is a regular public-sector borrower with an AAA-rated profile.
What happens after issuance may matter more than the sale itself. Reuters said the bonds were expected to carry an initial three-month lock-in, with exchanges aiming to develop a secondary market by December. One source told Reuters that “Subsequent trades can take place only between participants that hold both compatible CBDC and securities wallets.” Nishchay Nath, chief executive of BondScanner, told Business Standard that without freer trading the exercise remains a controlled pilot rather than a full market launch, even if the settlement plumbing works as designed.
That cautious design mirrors the way tokenised bonds have been introduced elsewhere. Reuters said REC’s deal would place India alongside markets in Europe and Hong Kong that have already experimented with blockchain-based issuance and settlement. The promise, echoed across the coverage, is that digital records could improve transparency, trim operating frictions, cut transaction costs and, over time, make it easier for investors to buy and sell corporate debt. For now, though, the experiment is still institutional, highly permissioned and dependent on a small circle of participants who are willing to use new wallets and new settlement processes.
Other issuers are already preparing to test whether the concept scales. Mint reported that Larsen & Toubro was lining up its own tokenised bond sale this week, seeking up to ₹500 crore through three-year notes expected to carry a coupon of about 7.40%. If that deal goes ahead, REC’s transaction may come to look less like a one-off demonstration for a fintech event and more like the opening trade in a broader attempt by Sebi and the RBI to rebuild part of India’s corporate bond market on connected digital rails.
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