In a strategic move to optimize its investment portfolio, Canara Bank announced on Friday its approval to initiate the process of diluting a 14.5% stake in its subsidiary, Canara HSBC Life Insurance Company Ltd. The bank plans to execute this by listing the company on major stock exchanges (BSE/NSE) through an initial public offering (IPO).
The proposed IPO will be subject to necessary approvals from the Reserve Bank of India and the Department of Financial Services, Government of India. Details regarding the size of the issue, timing, and other related modalities will be decided in due course, the bank stated in its regulatory filing.
Shares of Canara Bank responded positively to the news, closing 2.56% higher at Rs 118 post-announcement.
This decision is part of a broader strategy, as earlier in the day, Canara Bank's Board also approved the raising of Rs 8,500 crore via debt instruments for the financial year 2024-25. This includes Rs 4,000 crore through Basel III Compliant Additional Tier I bonds and Rs 4,500 crore through Tier II bonds, aimed at enhancing the bank's capital adequacy.
In another strategic move, Canara Bank disclosed plans to sell a 13% stake in Canara Robeco Asset Management Company (CRAMC) by taking the mutual fund subsidiary public. This follows the in-principle approval granted last December to commence the listing process of its mutual fund arm.
These initiatives underscore Canara Bank's efforts to strengthen its capital base and unlock value from its subsidiaries, setting the stage for sustained growth and financial stability.
