Interview with M.L. Kumawat: “Tokenised bonds can ease capital market investments in the Indian power sector”

REC Limited, a major Indian power sector financier, has successfully completed a pilot issuance of tokenised corporate bonds, raising 5 billion rupees. The issuance, conducted under the Securities and Exchange Board of India's (SEBI) Regulatory Sandbox Framework, attracted bids totaling approximately 7.96 billion rupees. This initiative demonstrated the feasibility of integrating distributed ledger technology with existing market structures to achieve same-day pay-in, allotment, and listing. By utilizing atomic delivery-versus-payment, the pilot successfully reduced settlement timelines and operational risks while maintaining compliance with the Securities Contracts (Regulation) Act, 1956. M.L. Kumawat, Executive Director of Finance at REC, emphasized that tokenization does not create a new asset class but rather enhances the efficiency and transparency of traditional debt instruments. The project involved extensive coordination between the RBI, SEBI, stock exchanges, and the NPCI to ensure regulatory alignment. This milestone signals a potential shift toward modernized debt capital market infrastructure in India, prioritizing operational resilience and streamlined settlement processes for future issuances.