Canara Bank to offload 14.50% stake; stock zooms ~9%

3 Jun 2024 , 02:15 PM

Canara Bank’s share price surged by around 9% and reached a new 52-week high in afternoon trade on June 3, following the company’s approval to reduce its stake in its subsidiary Canara HSBC Life Insurance Company through an initial public offering (IPO).

At around 1.05 PM, Canara Bank was trading 128.30, against the previous close of ₹118 on NSE. The counter touched a new 52-week high of ₹128.60 in today’s trade, so far.

Canara Bank has given its clearance to begin the process of listing the company on stock exchanges (BSE/NSE) through an initial public offering (IPO), thereby decreasing the bank’s 14.50% interest in its subsidiary Canara HSBC Life Insurance Company.

The Bank held about 51% stake in its insurance subsidiary at the end of fiscal year 2024. The approval of the Reserve Bank of India and the Department of Financial Services, Government of India, is mandatory for the same.

The issue’s scope, timing, and specifics will be determined eventually, the business stated.

The capital raising strategy for the financial year 2024–2025—which includes issuance of Additional Tier I and Tier II Bonds totaling up to ₹8,500 Crore—was approved by the company board during its meeting on May 31.

The plan outlines raising capital of ₹4,000 Crore through Basel III Compliant Additional Tier I Bonds for the fiscal year 2024–2025—subject to market circumstances and required approvals.

Additionally, subject to market circumstances and required permissions, it plans to raise capital through Basel III Compliant Tier II Bonds to the extent of ₹4,500 Crore during the FY 2024–2025.

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