On the back of improved rating, Rakesh Jhunjhunwala-backed Canara Bank shares jumped 7.5 per cent to touch over two-year high of Rs 245.85 per share on the BSE intraday trade on Monday. The stock eventually settled at Rs 244.25 per share, up around 7 per cent at the market close today. 

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The surge in the stock came after the rating agency ICRA has upgraded the rating of the public sector bank's Basel III Tier II Bonds to 'ICRA AAA (Stable)' from 'ICRA AA+(hyb) (Stable)' and on the Basel III Additional Tier I Bonds to 'ICRA AA+ (Stable)' from 'ICRA AA (hyb) (Stable)'. 

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ICRA in rating rational said the rating upgrade factors in the improvement in the solvency profile1 of Canara Bank is expected to sustain going forward.  

An improved capital position has supported the bank’s solvency profile, which is expected to get a further boost from improving profitability metrics and expectations of steady internal capital accruals, the rating agency further added. 

Ace investor Rakesh Jhunjhunwala, who is also termed as the Big Bull of the Indian stock markets, has made a fresh entry in Canara Bank, and picked up 29.10 million equity shares, or 1.6 per cent stake, as per the September shareholding pattern of the company available on the exchanges. 

Since the ace investor’s name has appeared in the shareholding pattern of the bank, the counter has jumped almost 40 per cent as compared to less than a 1 per cent rise in the S&P BSE Sensex. The bank had released the September shareholding pattern exactly a month ago on October 7, 2021. 

Canara Bank, in August, had raised Rs 2,500 crore through QIP by issuing 167.39 million equity shares to qualified institutional buyers (QIB) and the net proceeds will be used towards augmenting the Bank's Tier I capital to support the growth plans and to enhance its business.