Two years after YES Bank fiasco, AT-1 bonds rekindle investor interest

HNI, insurance demand, better bank performance driving interest in instrument

Just about two years ago, additional tier-1 bonds, which are a means of augmenting core equity for banks, were a pariah in Indian financial markets as a crisis in YES Bank caused enormous losses for those who had invested in these debt instruments.

If the aggressive pricing of AT-1 bonds issued by banks over the past couple of months is anything to go by, it seems that markets have shrugged off the risk aversion sparked by the YES Bank debacle and extended a warm welcome to these securities.

Since July, seven banks have raised funds totalling Rs 18,376 crore through