India’s Canara Bank (NSE:CANBK) announced on September 16 that it successfully conducted a bidding process to issue Additional Tier 1 perpetual bonds to strengthen its overall capital structure and support asset expansion. The debt issuance was executed via the electronic bidding platform of the National Stock Exchange (NSE).

The bank secured total subscriptions worth INR20.42bn ($212.414mn), comprising a base issue size of INR20bn and a green-shoe option of INR420mn. Under terms governed by guidelines from India’s capital markets regulator, the Securities and Exchange Board of India (SEBI), the unsecured, subordinated bonds carry an annual coupon rate of 8.10%.

According to a filing by the company with the NSE, the issuance attracted 111 individual bids from institutional investors. The bonds feature a face value of INR10mn each, with pay-in and allotment scheduled for September 18, 2026. Canara Bank retains an issuer call option executable on September 18, 2031, or on subsequent anniversary dates.

State-owned peers such as State Bank of India (NSE:SBIN) and Bank of Baroda (NSE:BANKBARODA) have similarly tapped debt markets to reinforce capital buffers. Market observers view the competitive coupon pricing as a reflection of robust institutional appetite for high-yielding bank paper.

Financial analysts expect the capital infusion to enhance Canara Bank’s Tier 1 capital adequacy ratio, enabling the lender to sustain loan growth across corporate and retail segments while maintaining financial resilience against potential credit risks.