REC Limited has successfully issued India's first pilot tokenised corporate bond under the Securities and Exchange Board of India's (SEBI) Regulatory Sandbox Framework, marking a significant step towards digitalisation of the country's debt market.

The pilot issue was sized at Rs 5 billion, comprising a base issue of Rs 1 billion and a green shoe option of Rs 4 billion. Bidding was conducted through the Electronic Book Provider platform of the National Stock Exchange of India (NSE).

The issue received bids worth Rs 7.96 billion, nearly eight times the base issue size. REC accepted Rs 5 billion at a coupon rate of 7.30 per cent per annum for a tenor of one year and nine months.

The tokenised mechanism enabled faster settlement, with pay-in, allotment and listing completed on the same day. The bonds have been listed on NSE and BSE.

The issuance introduces atomic Delivery-versus-Payment settlement and shared-ledger transparency to India's corporate bond market. It forms part of the Demat 2.0 initiative, under which securities ownership can be recorded and tracked using permissioned distributed ledger technology.

REC said the framework combines digital infrastructure, distributed ledger technology and CBDC-enabled settlement while retaining existing investor protection and regulatory safeguards.

The pilot was undertaken with the participation of SEBI, the Reserve Bank of India and market infrastructure institutions, including NPCI, depositories and stock exchanges. The initiative is expected to help reduce settlement risks and operational friction while supporting the development of next-generation capital market infrastructure.