PNB Board approves 10% stake dilution via IPO in Canara HSBC Life Insurance

Punjab National Bank's board has approved the initiation of the process for divesting 10 percent shareholding in its associate company Canara HSBC Life Insurance through an initial public offering (IPO) route.

According to the exchange filing made, The Board in its meeting has accorded its approval for initiating the process of diluting a 10 percent stake of the Bank in Canara HSBC Life Insurance Company, an associate company of the bank, by listing the company in Stock Exchanges (BSE/NSE) through Initial Public Offer (IPO). The same shall be subject to regulatory approvals.

 Currently, PNB holds a 23 percent stake in Canara HSBC Life Insurance. 

 

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Previously, IRDAI required PNB to reduce its ownership in one of its life insurance companies to 10 percent. Initially, the rule stated that a bank cannot be the main shareholder of two life insurance companies and must reduce its ownership to 10 percent in one of them.

However, this rule has been updated, and IRDAI now allows a bank to transition from being a main shareholder to an investor even if its ownership is up to 25 percent.

As per financial year performance ending, March 31, 2024, Canara HSBC Life had reported Rs 182 crore, up 15 percent over the surplus of Rs 158 crore recorded in precedent fiscal. 

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