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Canara HSBC Life Insurance Company, a joint venture backed by public sector lender Canara Bank, has officially filed draft documents with SEBI to launch an Initial Public Offering (IPO). The announcement was made on Tuesday, April 29. In this IPO, the company’s existing shareholders are planning to sell their shares – meaning no new shares will be issued.
What is the Canara HSBC Life Insurance IPO About?
The IPO will be a pure Offer for Sale (OFS). This means that the company itself will not raise any funds through the IPO. Instead, the current shareholders will sell a portion of their holdings to the public.
The total number of shares planned to be sold is up to 23.75 crore. Here’s a breakdown of who is selling and how much:
- Canara Bank plans to sell up to 13.77 crore shares
- HSBC Insurance (Asia-Pacific) Holdings will offload 0.47 crore shares
- Punjab National Bank (PNB) intends to sell up to 9.5 crore shares
Since this is a complete OFS, all the money raised will go to these shareholders – not the company itself.
Who Owns Canara HSBC Life Insurance?
Canara HSBC Life Insurance is a partnership between:
- Canara Bank, which holds a 51% stake
- HSBC Insurance (Asia-Pacific) Holdings, with a 26% stake
- Punjab National Bank, holding the remaining stake
Financial Performance of the Company
According to the draft documents, Canara HSBC Life Insurance earned ₹113 crore in net profit in the financial year ending March 2024. This is a 24.3% increase from the previous year.
However, the company’s revenue dropped slightly by around 1% during the same period. The financial results for FY2025 have not been released yet.
Who is Managing the IPO?
Some of the top financial institutions in India are handling the IPO process. The lead managers for the offer include:
- SBI Capital Markets
- HSBC Securities & Capital Markets India
- JM Financial
- Motilal Oswal Investment Advisors
- BNP Paribas
What Else is Happening with Canara Bank?
This IPO comes just a week after Canara Robeco Asset Management Company, another firm backed by Canara Bank, filed for its IPO. Earlier this year, Canara Bank’s Managing Director K. Satyanarayana Raju had announced plans to divest stakes in both Canara Robeco and Canara HSBC Life Insurance.
“We expect both companies to launch their IPOs in the next financial year,” he had mentioned in a recent analyst call.
Timing of the IPO
The draft prospectus did not reveal the exact timing or valuation of the IPO. However, the filing comes at a time when the Indian IPO market is facing a slowdown, largely due to volatility in stock markets.
Canara Bank Share Price Update
On the day of the announcement, shares of Canara Bank were trading at ₹99.29, up 0.85% from the previous close. However, the stock has come off its recent highs.
