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Canara Bank to Dilute 14.50% Stake in Canara HSBC Life Insurance via IPO

Bengaluru-headquartered Canara Bank has approved initiating the process of diluting a 14.50% stake in its subsidiary, Canara HSBC Life Insurance Company, through an initial public offering (IPO). This move is pending approval from the Reserve Bank of India (RBI) and the Department of Financial Services (DFS). Currently, Canara Bank holds a 51% majority stake in the life insurance company, while HSBC Insurance (Asia Pacific) owns 26%, and Punjab National Bank holds the remaining 23%.

Fundraising Plans

In addition to the IPO, Canara Bank has also approved raising up to ₹4,000 crore via additional tier-I (AT-1) bonds in FY25 and ₹4,500 crore via tier-II bonds in the current financial year. These efforts are part of the bank’s strategy to strengthen its financial position and support its growth plans.

Stock Performance

Following the announcements, shares of Canara Bank ended trading higher. On the BSE, the stock closed 3% up at ₹118 per share, and on the NSE, it settled 2.56% higher at the same price. Year-to-date, the stock has surged approximately 33%, with a significant increase of 90.5% over the past year.

Next Steps for IPO

The specifics of the IPO, including the issue size, timing, and modalities, will be determined in due course. This strategic move aligns with the bank’s earlier stated intent to list its two subsidiaries, Canara Robeco AMC and Canara HSBC Life Insurance, in FY25 as indicated by Managing Director and CEO K Satyanarayana Raju.

Canara Bank to Dilute 14.50% Stake in Canara HSBC Life Insurance via IPO_4.1