Can’t afford to buy a share? Well, here’s a slice of it, says Bangalore-based fintech startup

This is India’s first formally sanctioned test of tokenised equity ownership—an idea that’s already widely adopted in the US but still navigating early regulatory trials in India.

While the concept isn’t new, what’s significant is SEBI’s formal willingness to explore it as a regulated model in India, potentially opening the door for tokenised, direct equity ownership for millions of retail investors.

Last year, then-SEBI chairperson Madhabi Puri Buch had publicly acknowledged the growing demand for fractional ownership in Indian markets and confirmed that the regulator had written to the government seeking necessary amendments to the Companies Act to enable such a facility. “We have requested the ministry,” she said, “so let’s see what comes out.” Globally, the concept has allowed investors to own a fraction of expensive stocks--something already popular among Indian investors in US markets since 2020.

Have asked government to allow fractional ownership of shares in India, says SEBI chief

The Xaults project is being tested live under SEBI's sandbox now.

Team Xaults felicitated as one of the winner at Startup Maharathi Challenge in New Delhi

Access to blue chips

Backed by an IIMA Ventures (startup incubator and entrepreneurship center established by IIM Ahmedabad), Xaults' model differs from mutual funds, where investors only get indirect exposure through pooled assets. While platforms like Smallcase offer direct stock ownership via Demat accounts, they require buying full shares. Xaults aims to go further by enabling direct, fractional ownership through tokenised shares, making even high-value stocks accessible in parts.

"Mutual funds are designed by the fund managers and not by the investors, hence as an investor I cannot pick and choose the equities I want to invest in. Fractional ownership can bring hyper personalisation in investing at lower prices, think of creating your own index and start your investment journey with a few hundred rupees," said Singh.

The shares will be digitally converted into tokens on a blockchain. These tokens will carry full ownership rights and can be traded independently under a format like “MRF-T” for tokenised MRF shares. Investors holding all underlying tokens of a stock can convert them back into a full share in their Demat account.

In the US, fractional shares usually give price exposure through pooled setups which means you benefit if the stock rises, but don’t actually own it. Xaults, on the other hand, is offering real legal ownership, where each token directly represents a piece of the actual share and can even be converted back into a full share.

Xaults plans to roll out the model in two phases. First by working with depositories to tokenise shares and handle ownership transfers, and later by using smart contracts to automate trade settlements and reconciliation with clearing agencies.

It is currently working with prominent stock broking platforms to develop some use cases.

If the project advances beyond the sandbox phase, one of the key considerations will be the mechanism for trading such tokenised shares, whether through existing stock exchanges with a distinct identifier or via a separate exchange framework. This would likely require further regulatory clarity on liquidity treatment, compliance processes, and compatibility with current market infrastructure.

The startup is positioning itself not just as a consumer product but as an infrastructure platform - a middleware layer that banks, brokers, and exchanges could use for tokenised assets. What sets Xaults apart isn’t the idea but how they’re building it from scratch in sync with regulators, and the fact that SEBI is open to experimenting with it.

Rethinking MSME credit with tokenised invoices

Launched in 2023 by Singh and his engineering batchmate Shubham Sharma, Xaults has recently concluded its pilot on a second product under the RBI’s regulatory sandbox, this time focused on invoice financing for MSMEs, in partnership with ICICI Bank, HDFC Bank, and Yes Bank.

The idea is to tokenise invoices approved by large companies like Tata Motors. So, if Tata Motors approves a Rs 100 invoice, Xaults creates 100 tokens of Re 1 each. These tokens can then be passed down the supply chain, reaching smaller vendors such as tier-2 or tier-3 suppliers who normally don’t qualify for bank credit.

“In most supply chains, only the top-level vendors get loans from banks,” Singh explains. “The smaller players further down often have to borrow at 20 percent or more from NBFCs or informal lenders.”

But with tokenisation, the credit risk shifts from the small vendor to the large company backing the invoice—making it easier for smaller businesses to get loans from banks at better rates.

Each token is traceable, auditable, and programmable, and becomes redeemable as Re 1 on the invoice due date. This system is being tested in partnership with the Indian Banks’ Digital Infrastructure Company (IBDIC), a tech body backed by 18 Indian banks.

RBI had granted a limited regulatory exemption to allow this model to be piloted. Over time, these invoice tokens could also connect with government platforms like GSTN or CBDC-based systems for smoother tracking and settlements.

A CBDC use case 

Xaults is also experimenting with CBDC-powered loyalty programmes for small merchants. In partnership with SBI Payments and Bank of Baroda, it has built a programmable rewards engine that lets kirana stores launch loyalty programmes without relying on third-party software—typically priced at Rs 3,000-Rs 4,000 per month.

By leveraging CBDC ( Central Bank Digital Currency or Digital Rupee) programmability, merchants can automate reward disbursals directly on merchant apps.

Another product in the pipeline would allow corporates to invest idle cash into short-term, anchor-backed tokens-essentially receivable tokens issued by other large companies.

“Corporates sit on a lot of cash. With this model, they could invest in tokenised receivables backed by companies like Reliance or Tata. It’s short-duration exposure with relatively lower risk,” Singh explains

Background

Before Xaults, Singh led technology transformation across Latin America, the Middle East, and Africa. In 2020, he quit to pursue an MBA, and teamed up with Sharma, who was leading the product, engineering and AI team at Singapore-based Creadits.

The company bootstrapped for nearly two years before raising its first round in 2023 from JSW Ventures MD Sachin Tagra and a group of 10 angels at an IIT Bombay pitch event. Since then, Xaults has won several awards, including at Dubai Fintech Festival and Startup Mahakumbh 2025, and is currently incubated under IIM-A’s fintech inclusion programme.

As the Xaults pilot progresses, industry players say fractional ownership could have lasting implications for how India’s capital markets serve retail investors.

“Fractional ownership for stocks will unlock several use-cases for the capital markets industry, increasing efficiency across the entire system,” said Vasanth Kamath, Founder and CEO of Smallcase. “Along with the recently introduced model portfolios framework, this would help more individual investors access diversified long-term investments with a customisation and personalisation layer.”