REC Limited Issues India's First Tokenised Corporate Bond Under SEBI Pilot
Key points
- REC Limited, a state-owned Indian power-sector lender, issued a ₹5 billion ($59 million) tokenised bond under SEBI's distributed ledger pilot and sandbox programme.
- The original issuance target was ₹1 billion; subscriptions of nearly eight times that figure triggered a green shoe option, lifting the deal to the full ₹5 billion.
- HDFC Bank and ICICI Bank were among the investors; bidding took place on NSE's EBP platform and the bond is listed on both NSE and BSE.
- Settlement employed India's wholesale CBDC to facilitate delivery versus payment, though REC and SEBI describe it as a CBDC-enabled mechanism rather than direct CBDC settlement, leaving participant-level details unclear.
- A new DEMAT 2.0 wallet account type was introduced by depositories to reflect DLT-based holdings, and SEBI's terminology of 'tokenised' rather than 'digitally native' bonds may carry distinct legal implications worth watching.
REC Limited, a state-owned lender to India’s power sector, has completed a ₹5 billion (approximately $59 million) tokenised bond issuance under a distributed ledger pilot and sandbox framework established by the Securities and Exchange Board of India (SEBI). The deal originated as a ₹1 billion placement but demand proved substantially stronger than anticipated: subscriptions reached nearly eight times that figure during book building, prompting REC to exercise a green shoe option and upsize to the full ₹5 billion. HDFC Bank and ICICI Bank were among the institutional investors that participated.
Structurally, the bond carries a coupon of 7.30% per annum with a tenor of one year and nine months. Bidding occurred on the National Stock Exchange’s (NSE’s) Electronic Book Provider (EBP) platform, and the bond was listed on both NSE and the Bombay Stock Exchange (BSE). To accommodate distributed ledger technology (DLT) holdings, a new category of securities account, described as a DEMAT 2.0 wallet, was made available through India’s depositories.
Two questions shadow the headline numbers. First, SEBI has consistently referred to these instruments as tokenised bonds rather than digitally native or digital bonds, a distinction that may carry legal weight even if it has so far been treated as a matter of phrasing. Second, settlement used India’s wholesale central bank digital currency (CBDC) to enable delivery versus payment (DvP), but both the REC announcement and earlier SEBI commentary frame this as a CBDC-enabled or CBDC-based mechanism rather than outright CBDC settlement, leaving open exactly which participants settled in CBDC and on what basis.
For operators watching India’s capital markets infrastructure develop, the strong oversubscription signals genuine institutional appetite rather than a ceremonial pilot transaction. Resolving the tokenised-versus-digital-native classification and clarifying the precise scope of CBDC settlement will matter considerably for how subsequent issuers structure deals and how investors account for holdings under this framework.