Canara Bank Plans ₹5,000 Crore Fundraise Through Basel III Tier 2 Bonds

The state-owned lender has outlined a fresh capital-raising programme aimed at augmenting its regulatory buffers. The bank stated that it intends to mobilise funds through Basel III-compliant Tier 2 bonds, with the issuance scheduled for February 26, 2026.

The proposed structure includes a combination of a base issue and an additional green shoe option to accommodate excess demand. The fundraising move aligns with broader sector efforts to reinforce capital adequacy amid sustained credit requirements.

Planned Tier 2 Bond Issuance and Regulatory Framework

Canara Bank confirmed that it will raise up to ₹5,000 crore via Tier 2 bonds under the Basel III guidelines. The fundraising comprises a base issue size of ₹2,000 crore, accompanied by a green shoe option of up to ₹3,000 crore.

The inclusion of a green shoe option will enable the bank to retain additional investor subscriptions if required. The issuance will be conducted through the Electronic Bidding Platform of the National Stock Exchange on February 26, 2026.

Overview of Canara Bank’s Operations and Market Position

Canara Bank is one of India’s largest public sector banks with extensive operations across retail, corporate, and priority sector lending. The bank manages a wide network of branches and digital channels to support its nationwide customer base.

Its product suite includes deposit services, loan offerings, trade finance, and treasury operations. Over the decades, the institution has continued to expand its presence while maintaining a focus on regulatory compliance and financial stability.

Capital Structure and Implications of the Fundraise

Tier 2 bonds form part of a bank’s regulatory capital under Basel III norms, enhancing its overall capital adequacy ratio. These instruments typically contribute to strengthening the institution’s long-term capital base and supporting credit deployment.

The proposed fundraising will add to the bank’s capacity to meet ongoing regulatory requirements while building buffers for business expansion. The option to raise an additional ₹3,000 crore through the green shoe mechanism provides flexibility in line with potential demand.

Canara Bank Share Price Performance

On February 25, 2026, Canara Bank share price opened at ₹157.49, compared to the previous close of ₹157.03. During the session, as of 1:20 PM IST, the stock had touched a high of ₹159.35 and a low of ₹156.90, and was trading at ₹158.70, up by 1.05%.

The stock recorded a traded volume of 194.02 lakh shares and a traded value of ₹307.06 crore on the NSE. The market capitalisation stood at ₹1,43,143.95 crore.

Read More: Canara Bank Share Price Rises 2% as Stable Ratings and Strong Asset Quality Support Outlook.

Conclusion

Canara Bank’s planned issuance of Basel III-compliant Tier 2 bonds marks a significant step towards reinforcing its capital structure. The fundraising plan provides the bank with additional capacity to support credit growth while maintaining regulatory alignment. The use of a green shoe option enhances flexibility in meeting subscription levels. The move reflects ongoing efforts by lenders to build stronger capital buffers in a growing credit environment.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.