India Launches Tokenized Bond Market with REC Ltd.'s Historic Issuance
India has taken its first step into the tokenized bond market with REC Ltd., a state-owned power sector financier, issuing the country's first tokenized corporate bond. HDFC Bank and ICICI Bank were among the roughly 20 institutional investors who bought into the offering, which raised ₹500 crore (approximately $59 million) at a coupon rate of 7.30%. The tenor was about one year and nine months.
The demand for the bond was strong, with bids totaling around ₹796 crore, making the issuance nearly eight times oversubscribed against its base issue size. This suggests that institutional investors are eager to participate in tokenized bonds, which offer several benefits such as atomic settlement and same-day listing on stock exchanges.
The tokenized bond operates under the Securities and Exchange Board of India's (SEBI) regulatory sandbox framework, which allows for limited access exclusively to qualified institutional investors. This approach contains risk while generating institutional data that regulators need before deciding whether to scale the framework more broadly.