India's REC set to debut tokenised corporate bond sale next week, bankers say

State-run REC plans to raise 5 billion rupees ($52.92 million) through a tokenised corporate bond sale in India next week, according to three merchant bankers cited by Business Recorder. The bonds mature in one year and eight months, and the sale would be the country's debut debt issue built on blockchain, allowing transactions to settle almost instantly.

Under this model, the creation, trading, clearing and ownership of a bond are logged electronically on a shared digital ledger. Investors will pay in the central bank's digital currency. This places India in the same group as Europe and Hong Kong, where ledger-based bonds are already issued and settled.

The base issue is 1 billion rupees, and REC can retain an extra 4 billion rupees through a greenshoe option, with bidding scheduled for Monday. Only investors holding active security and CBDC wallets will be allowed to bid. Earlier last week, Reuters reported, citing sources close to the matter, that India's markets regulator and central bank are jointly promoting the technology, with a pilot issue expected in early September.