Canara HSBC Life Secures Rs 750 Crore from Anchor Investors Before IPO Launch

Canara HSBC Life Insurance Company Ltd has secured over Rs 750 crore from anchor investors. This comes just before its initial public offering (IPO) opens for public subscription. The anchor book saw participation from institutional investors like ICICI Prudential Mutual Fund, HDFC Mutual Fund, and others. According to a circular on BSE's website, the company allocated about 7.08 crore equity shares to 33 funds at Rs 106 per share.

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The IPO, valued at Rs 2,516 crore, will be open for subscription from October 10 to October 14. The price band is set between Rs 100 and Rs 106 per share. At the upper end, the company aims for a valuation of approximately Rs 10,000 crore. Canara HSBC Life Insurance is a joint venture with Canara Bank holding a 51% stake and HSBC Insurance Asia Pacific Holdings owning 26%.

IPO Details and Share Allocation

The IPO is entirely an offer for sale (OFS) of 23.75 crore equity shares by promoters and an investor. Under this OFS, Canara Bank will sell 13.77 crore shares, HSBC Insurance Asia-Pacific Holdings Ltd will offload 47.5 lakh shares, and Punjab National Bank plans to divest 9.5 crore shares. As it is an OFS, the company will not receive any proceeds; instead, funds will go to selling shareholders.

In terms of allocation, half of the IPO is reserved for qualified institutional buyers (QIBs), while retail investors have a 35% reservation. The remaining 15% is set aside for non-institutional investors. Investors can bid for a minimum of 140 shares and in multiples thereof.

Company Background and Market Debut

Established in 2007, Canara HSBC Life has become a significant bank-led private player in India's life insurance sector. The company is expected to make its stock market debut on October 17. In December 2024, Canara Bank announced receiving approval from the Reserve Bank to divest its stake in life insurance and mutual fund ventures.

Canara HSBC Life's IPO aims to attract various investors with its structured allocation strategy. The company's growth trajectory since its inception highlights its position in the Indian insurance market. With strategic backing from major banks and financial institutions, it seeks to leverage this IPO for further expansion.

With inputs from PTI