Canara, ICICI Bank gear up for Rs 7,500 crore bond issue this week

Indian banks are getting into the fundraising mode with Canara and ICICI all set to hit the bond market this week with a cumulative Rs 7,500 crore target.

ICICI Bank plans to raise Rs 4,000 crore through 15-year tier-2 bonds on November 27, comprising a Rs 1,000 crore base issue and a Rs 3,000 crore green shoe option at a coupon of 7.45%, according to people familiar with the matter.

Canara Bank will hit the market on November 28 with its Rs 3500 crore additional tier 1 (AT1) bonds, managing director Satyanarayana Raju told ET. The base issue size is Rs 1,000 crore.


"We would like to maintain the capital adequacy ratio over 16%," Raju said.

This will be the first AT1 bond issue this fiscal year by any bank.

Meanwhile, the Jammu and Kashmir Bank board will meet today to consider tier 1 or tier 2 capital raising.

The bank has a board approval for a total of Rs 9,500 crore fundraise this fiscal. After the AT1 bond issue, the balance Rs 6000 crore will be raised in tier 2 bonds later.

ICICI Bank, on the other hand, had already raised Rs 1000 crore in June. The lender reported a capital adequacy ratio of 17% as of September 30, with Tier-1 at 16.35%.

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