Canara Bank to dilute 14.5% stake in its subsidiary Canara HSBC Life Insurance Company via IPO; stock hovers near 52 week high

Canara Bank shares gained over 5 per cent and were one per cent away from its 52-week high of Rs 126.53 apiece on BSE. The buying interest was sparked after the bank announced to dilute 14.50 per cent stake in its subsidiary Canara HSBC Life Insurance Company Ltd by listing the Company in Stock Exchanges (BSE/NSE) through an Initial Public Offer (IPO).

"Canara Bank has accorded approval for initiating the process of diluting a 14.50 per cent stake of the Bank in its subsidiary M/s Canara HSBC Life Insurance Company Ltd by listing the Company in Stock Exchanges (BSE/NSE) through Initial Public Offer (IPO)," the filing read. 

The filing further said that the same shall be subject to approval of the Reserve Bank of India and the Department of Financial Services, Government of India.

Additionally, the size of the issue, opportune time, and modalities of the issue will be decided in due course. 

Moreover, Canara Bank announced on May 31 that its board has approved issuing Rs 8,500 crore through bonds to fund business expansion in 2024-25.

Currently, Canara Bank has 51 per cent stake, HSBC holds 26 per cent stake and PNB has 23 per cent stake in the insurance joint venture. As per Zee Business research, partnership was done in 2008.   

Further, out of the above Capital Raising Plan, the Board of Directors of the bank has approved the following: 

>> To raise capital through Basel III Compliant Additional Tier I Bonds to the extent of Rs 4000 crore during the FY 2024-25 subject to market conditions and necessary approvals. 

>> To raise capital through Basel III Compliant Tier II Bonds to the extent of Rs 4500 crore during the FY 2024-25 subject to market conditions and necessary approvals.

Canara Bank share price: Past performance 

In a year, shares of Canara have given returns of over 89 per cent against Nifty50's rise of over 21 per cent.

June 3 session on Dalal Street here. For all other news related to business, politics, tech and auto, visit Zeebiz.com. 

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