Canara Bank Ltd. on Thursday received approval from the Reserve Bank of India for divesting its shareholding in Canara Robeco Asset Management Co. and Canara HSBC Life Insurance Co. through initial public offerings.
The state-owned lender has been allowed to sell a 13% stake in Canara Robeco AMC and 14.5% in Canara HSBC Life Insurance, according to an exchange filing.
The RBI has guided Canara Bank to adhere to the Oct. 31, 2029 timeline for bringing its stake in these entities up to 30% as per regulatory requirements.
Following RBI approval, the bank said it will initiate the process of IPO.
The Canara Bank board had given its 'in-principle' approval for the listing of its mutual fund subsidiary, Canara Robeco AMC, in December last year.
Formally known as the Canbank Mutual Fund, the AMC came into existence in 1993. Canara Bank entered into a joint venture with the Robeco Group in 2007 to rename the fund Canara Robeco Mutual Fund.
Canara HSBC Life Insurance is a joint venture promoted by Canara Bank (51%) and HSBC Insurance (Asia Pacific) Holdings Ltd. (26%) since 2008. Punjab National Bank Ltd. is also a shareholder of the company, holding 23% as an investor. The bancassurance-led insurance company is based in Gurugram and has more than 100 branch offices across India.
Shares of Canara Bank closed 0.41% lower at Rs 108.15 apiece, ahead of the announcement, compared with a 1% advance on the benchmark BSE Sensex.
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