Canara Bank raises ₹3.5K cr via AT1 bonds; Bharati Telecom raises ₹8.5k cr

Canara Bank has raised ₹3,500 cr through its first at1 bond issue of FY26, while Bharti telecom secured ₹8,500 cr via short-tenor bonds to refinance upcoming maturities amid rising bank bond activity

State-owned Canara Bank on Friday raised Rs 3,500 crore through additional tier I (AT1) bonds at 7.55 per cent interest rate in the first such issuance of FY26, said sources.

 

Separately, Bharti Telecom raised Rs 8,500 crore through two tranches of bonds maturing in 24 months and 38 months. The holding company of telecom giant Bharti Airtel will pay an annual coupon of 7.30 per cent and 7.40 per cent for the bonds. The funds are being raised largely for refinancing upcoming debt maturities. In October, Bharti Telecom raised Rs 10,500 crore through the sale of bonds maturing in two years and in three years and two months at an annual coupon of 7.35 per cent and 7.45 per cent, respectively.

 

Canara Bank’s AT1 issuance had a base size of Rs 1,500 crore and a green-shoe option of Rs 2,000 crore. This is the first AT1 bond issuance in nearly a year. State Bank of India (SBI), in October last year, raised Rs 5,000 crore through AT1 bonds at a coupon of 7.98 per cent.

 

AT1 bonds are perpetual instruments which have certain equity-like characteristics and features. These instruments are used by banks to boost their core equity capital.

 

Banks were largely absent from the domestic debt capital market in FY26, dampening overall corporate bond market activity so far.

 

Recently, banks have stepped up bond issuance with mostly Tier-II issuances. State Bank of India’s (SBI’s) Rs 7,500 crore fundraise through Tier-II bonds at record levels of 6.93 per cent in the second half of October was the first large bond issuance by a bank in FY26. Earlier this week, ICICI Bank raised Rs 3,945 crore at 7.4 per cent through Tier-II bonds.

 

Axis Bank, India’s third-largest private sector lender, also tapped the market this week, raising Rs 5,000 crore at 7.27 per cent through 10-year infrastructure bonds, the first such issuance by a lender in FY26.

 

Indian Bank, Indian Overseas Bank, and Punjab National Bank are also looking to raise funds this year through Tier-II bonds.