Canara Bank (IPO) has revealed its intention to divest a 14.5% stake in its subsidiary, Canara HSBC Life Insurance Company, through an initial public offering (IPO).

 

This move, announced on May 31st, signifies the bank's strategy to reduce its holding in the life insurance venture, wherein it currently holds a majority stake of 51%. Established in 2008 through a partnership with HSBC Insurance (Asia Pacific), the joint venture also involves HSBC owning a 26% stake in the company.

In accordance with regulatory requirements, Canara Bank disclosed its plan to offload a portion of its ownership in Canara HSBC Life via the IPO. The proposal awaits approval from the Reserve Bank of India and the Department of Financial Services, Government of India.

The specifics regarding the IPO, including its size, timing, and execution, will be determined in due course, as per Canara Bank's statement. Concurrently, the bank has announced its intention to raise ₹8,500 crore through debt instruments in the fiscal year 2025. This fundraising initiative, sanctioned by the board, entails raising up to ₹4,000 crore through Basel III Compliant Additional Tier I Bonds, and up to ₹4,500 crore through Basel III Compliant Tier II Bonds.

Following these disclosures, shares of Canara Bank experienced a positive uptick, settling 2.56% higher at ₹118 apiece on the NSE. The stock's performance has shown significant growth, with a year-to-date increase of approximately 33% and a remarkable surge of 90.5% over the past year.