Canara Bank gives approval to dilute 14.50% stake in insurance unit

Canara Bank on Friday granted an approval for initiating the process of diluting its 14.50 per cent stake in its subsidiary Canara HSBC Life Insurance Company Ltd.

"The bank has accorded approval for initiating the process of diluting 14.50 per cent stake of the Bank in its subsidiary Canara HSBC Life Insurance by listing the company in Stock Exchanges (BSE/NSE) through initial public offer (IPO). The same shall be subject to approval of Reserve Bank of India and Department of Financial Services, Government of India," the lender stated in an exchange filing.

The size of the issue, opportune time and modalities of issue will be decided in due course, it added.

This announcement came post market hours today. Shares of Canara Bank settled 2.56 per cent higher at Rs 118.

Earlier in the day, the lender's Board approved the raising of Rs 8,500 crore via debt instruments (Additional Tier I / Tier II Bonds) for the financial year 2024-25.

The PSU plans to raise capital through Basel III Compliant Additional Tier I bonds to the extent of Rs 4,000 crore during the FY 2024-25. In addition, it aims to raise capital through Basel III Compliant Tier II bonds to the extent of Rs 4,500 crore during the FY25.

Canara Bank shares saw heavy trading volume today on BSE as around 54.13 lakh shares changed hands. The figure was higher than the two-week average volume of 17.55 lakh shares. Turnover on the counter came at Rs 63.57 crore, commanding a market capitalisation (m-cap) of Rs 1,07,033.68 crore.