The Board of Punjab National Bank (PNB) has approved the initiation of the process to dilute 10% of its shareholding in Canara HSBC Life Insurance through an initial public offering (IPO). PNB currently holds a 23% stake in this life insurance joint venture.
Background
PNB acquired its stake in Canara HSBC Life Insurance following the amalgamation of the erstwhile Oriental Bank of Commerce (OBC), which originally held the 23% stake. Canara Bank owns 51% of the company, while HSBC Insurance (Asia Pacific) Holdings Ltd holds the remaining 26%.
Approval and Regulatory Process
The board’s approval, granted on June 4, 2024, is for listing the company on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) through an IPO. This process will be subject to obtaining necessary regulatory approvals.
Market Reaction
On the day of the announcement, PNB’s shares experienced a nearly 15% drop. However, despite this loss, the stock has gained 20% so far this year.
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