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Informist, Tuesday, Aug. 25, 2026

 

NEW DELHI – The Securities and Exchange Board of India, in coordination with the Reserve Bank of India, is planning to launch a pilot project for tokenised bonds, according to people aware of the development. State-owned power financier REC Ltd. will be the first tokenised bond issuer, they added. The markets regulator is anchoring the launch of the new instrument, which will likely be done on a pilot basis, an official at REC said. 

 

It is being planned by the regulators and could be launched soon, the official told Informist. "SEBI has more details as REC is only the issuer...but as of now, this is in a nascent stage," the official added. The pilot, if launched, will put India alongside markets such as Europe and Hong Kong, which are also using blockchain technology for issuing and settling bonds.

 

While the company has been informed that the issuance will be launched next month at an event, the official said there could be slight delay considering numerous regulators and financial agencies, including clearing corporations, have to be onboarded with the plan. "Those who have to invest in the instrument, they have to be onboarded as well," the official said.

 

Tokenised bonds are debt securities whose ownership, issuance, trading and settlement are recorded digitally on a blockchain or distributed ledger. The technology can allow transactions to be completed almost instantly, compared with the traditional process of recording and settling bond transactions.

 

The official said settlement will be digital, likely through central bank digital currency, and is expected to be much faster than regular bonds, which are settled physically. "Hopefully, settlement will be done faster," he said, adding that there is no clarity on allotment of the issuances yet.

 

The REC official did not comment on the size and tenure of the proposed issue. According to media reports, REC is expected to issue less than INR 5 billion worth of tokenised bonds in the pilot, and it is likely to be restricted to a select group of investors, with the names of participating investors yet to be disclosed.

 

The official, however, said the issue through the new instrument will be part of REC's existing board-approved borrowing programme. "It will be under the same board-approved fund-raising plan," the official said. The Maharatna company's board has approved an INR-1.60-trillion market borrowing programme for 2026-27 (Apr-Mar).

 

REC typically borrows through a combination of domestic and offshore borrowing. Of the INR 1.60-trillion fundraising plan, the company plans to raise INR 1.50 trillion from the domestic market and the remaining from overseas markets. 

 

REC, among the largest borrowers in the corporate bond market, has been rated 'AAA' for nearly two decades and enjoys some of the lowest interest rates in the market. REC's capital adequacy ratio for FY26 was 23.11%, lower than 25.99% at the end of FY25. For the June quarter, REC posted a net profit of INR 41.49 billion and revenue of INR 142.96 billion. 

 

REC, formerly known as Rural Electrification Corp., is a non-banking financial company under the power ministry, and lends to state electricity boards, state-owned power utilities, rural electric cooperatives, and independent power producers. Tuesday, the company's shares closed at INR 326 on the National Stock Exchange, down 0.6% from Monday.

 

Thursday, Amarjeet Singh, whole-time member of SEBI, said at the Associated Chambers of Commerce and Industry of India's 9th National Summit and Awards on Corporate Bond Market that SEBI has been examining tokenisation to improve accessibility, transparency and efficiency in the market. The work is being taken forward in close coordination with the Reserve Bank of India, and a pilot project is expected in the near future, he had said.

 

The idea is to make settlement more efficient and reduce reconciliation costs. The pilot is expected to examine this aspect along with the feasibility of automated coupon payments and other servicing events through smart contracts, Singh said.

 

Also, the state-owned company plans to raise up to INR 60 billion through the issuance of two bonds with different maturities and has invited bids for the same Thursday. The power-sector financier plans to raise up to INR 30 billion through the issuance of bonds maturing on Oct. 31, 2028. REC also plans to raise up to INR 30 billion through the issuance of bonds maturing on Oct. 31, 2036.  End

 

Reported by Vaishali Tyagi

Edited by Deepshikha Bhardwaj

 

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