Shares of Canara Bank were climbing on Monday as the state-owned lender looks to launch an IPO of its life insurance arm.
What Happened: The firm said after hours on Monday it has approved initiating the process to dilute a 14.50% stake in its subsidiary, Canara HSBC Life Insurance Company, by listing the company on stock exchanges through an IPO.
The decision awaits approval from the Reserve Bank of India and the Department of Financial Services, Government of India.
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“The size of the issue, opportune time, and modalities of the issue will be decided in due course. The bank will update the exchanges of all material developments with regard to the same, as and when required, as per applicable regulations,” the bank added.
Earlier on May 31, Canara Bank’s board approved raising ₹8,500 crore through bonds to fund business growth in 2024-25. The decision was made during a board meeting held that day. The bank plans to raise capital through Basel III compliant additional tier I bonds to the extent of ₹4,000 crore, subject to market conditions and necessary approvals.
Price Action: Canara Bank’s share price was up 5.6% at ₹124.60 amid broader gains for the market and public sector banks, in particular.
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