Canara Bank Subsidiary IPO: Canara HSBC Life Insurance Gets SEBI Nod

Market Performance

The life insurance sector has seen steady growth, driven by increasing awareness, bank-led distribution, and rising demand for insurance products. Canara HSBC Life Insurance, a bank-led private insurer, has been a notable player in this expanding market.

Main News

Canara HSBC Life Insurance Company Ltd, a joint venture promoted by Canara Bank, HSBC Insurance (Asia-Pacific) Holdings, and Punjab National Bank (PNB), has received SEBI approval for its Updated Draft Red Herring Prospectus (UDRHP). This regulatory nod is a significant step forward, setting the stage for its proposed initial public offering (IPO).

The proposed IPO will comprise an offer for sale of up to 23.75 crore shares, including:

• Up to 13.77 crore shares by Canara Bank
• Up to 47 lakh shares by HSBC Insurance (Asia-Pacific) Holdings
• Up to 9.5 crore shares by Punjab National Bank

Company Details

Founded in 2007, Canara HSBC Life Insurance has rapidly grown into a leading bank-led life insurer in India. Some highlights include:

• Third-highest assets under management (AUM) among public sector-promoted life insurers as of March 31, 2024
• Second-largest bank-led life insurer in India by number of lives covered in FY24
• Consistent growth in Annualised Premium Equivalent (APE), reflecting its expanding product portfolio and increasing market penetration

Financial performance demonstrates strong momentum:

• Profit after tax (PAT) grew at a CAGR of 232.61%, from ₹10.2 crore in FY22 to ₹113.3 crore in FY24
• The profit after tax (PAT) for the nine-month period ending December 31, 2024, was ₹84.8 crore.

Summary

The SEBI nod for Canara HSBC Life Insurance’s UDRHP is a major milestone for the company. With strong financials, a bank-led distribution advantage, and a growing presence in India’s life insurance market, the IPO marks an important moment for both the company and the sector.

The approval paves the way for investors to participate in a life insurer with a proven track record, robust growth, and strategic backing from prominent banks and financial institutions.