In a bid to monetise its non-core business, public sector lender Canara Bank has started the process of launching an initial public offer (IPO) of two of its subsidiaries, Canara Robeco Asset Management and Canara HSBC Life Insurance Company, The Economic Times (ET) reported citing people aware of the development.
"The state-owned bank has met a few investment bankers recently to assess the market conditions to launch two IPOs of its subsidiaries, and a formal request for proposal (RFP) for acting as book running lead managers will be issued soon," a person aware of the development was quoted as saying.
Canara Bank and ORIX Corporation Europe NV own 51 per cent and 49 per cent stakes in Canara Robeco AMC. In Canara HSBC Life Insurance Company, Canara Bank owns 51 per cent, while HSBC and Punjab National Bank own 26 per cent and 23 per cent, respectively.
In the public offer of Canara Robeco AMC, Canara Bank and ORIX Corporation are likely to sell a part of their stake. On the other hand, in the life insurance firm, the stake of Canara Bank is expected to be diluted.
PNB has already announced that it will not sell its stake in Canara HSBC Life Insurance and will remain an investor. It has bought the stake after merging with the Oriental Bank of Commerce (OBC).
If listed, Canara Robeco AMC will be the fifth mutual fund to list after HDFC, Nippon Life, UTI, and Aditya Birla, ET report added. As of March 31, Canara Robeco AMC has assets under management worth Rs 62,485 crore. In the quarter ended March 31, it reported a revenue of Rs 154 crore and a net profit of Rs 60 crore. Canara HSBC Life Insurance reported a net profit of Rs 10.24 crore in the same period.
