Larsen & Toubro Ltd (L&T) plans to raise up to ₹500 crore through tokenized bonds this week, following the Rural Electrification Corporation Ltd (REC) which raised ₹500 crore via its first tokenized bond issue on Monday, according to livemint.com. This move signals a new phase for India's debt markets by leveraging blockchain technology for bond issuance.
The REC bonds, maturing on 31 May 2028, were issued at a coupon rate of around 7.40%. These tokenized bonds are conventional debt securities whose ownership and transaction records are maintained on a blockchain or distributed ledger. A person involved in L&T's plan confirmed the upcoming issuance, which is expected to follow the blockchain-based infrastructure model pioneered by REC.
Tokenized bonds represent a significant innovation in India's debt market, offering enhanced transparency and efficiency by using blockchain technology. REC's successful ₹500 crore issuance is the first of its kind in India, setting a precedent for other large corporates like L&T to adopt this method. This approach aligns with global trends where blockchain is increasingly used to digitize and streamline bond markets.
L&T's proposed bonds are expected to have a three-year maturity and carry a yield or coupon of around 7.40%, similar to REC's issuance. The exact date of the issuance is scheduled for this week, marking a key milestone in the adoption of blockchain for corporate bond issuance in India.