Canara Bank shares in focus after issuance of Basel III bonds worth Rs 3,500 crore

Canara Bank is expected to be in the limelight on Wednesday, December 3, after the state-owned lender announced that it has raised Rs 3,500 crore through a fresh issuance of Basel III-compliant Additional Tier I (AT1) bonds – a key instrument used by banks to strengthen their core capital.In its regulatory filing, the bank said it has issued 7.55% unsecured, subordinated, listed, rated, non-convertible, perpetual, fully paid, taxable AT1 bonds structured as debentures of face value of Rs 1 crore each. AT1 bonds have a perpetual nature and are part of a bank’s Tier I capital. They offer higher returns due to their higher risk profile.

The issue, called Series I, included a base size of Rs 1,000 crore and a green-shoe option of Rs 2,500 crore, both of which were fully subscribed, reflecting strong investor demand.

Key details of the issue

Canara Bank has raised Rs 3,500 crore through its latest additional Tier I bond issue, giving the lender additional strength in its core capital structure. The bonds have been assigned the ISIN INE476A08266, which provides a unique identification code for investors and market participants.

The bank has issued a total of 3,500 bonds, each with a face value of Rs 1 crore. The entire issue opened and closed on November 28, 2025, signaling strong investor interest, allowing the bank to complete the process in one day. The bonds were officially granted shortly afterwards, on December 2, 2025.

These instruments are perpetual in nature, meaning they have no fixed redemption date, in line with the structure of AT1 capital instruments. Investors receive an annual coupon of 7.55%, with payouts occurring on December 2 each year. Because these are unsecured bonds, they carry a higher risk, but also offer a relatively attractive return.

Canara Bank has proposed to list the bonds on the National Stock Exchange (NSE), which would facilitate trading in the secondary market and provide liquidity to investors. A total of 37 allottees participated in the issue, indicating a reasonable spread across investor categories.

This successful capital raise is expected to strengthen the bank’s Tier I capital buffer, potentially improving its financial resilience and impacting investor sentiment as the market enters the mid-week trading session.

Shares of Canara Bank closed 1.2% higher at Rs 152.03 on Tuesday, with the company’s market capitalization reaching Rs 1,37,901 crore.

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