Canara HSBC Life Insurance Company IPO

About Canara HSBC Life Insurance Company IPO

Canara HSBC Life Insurance Company Limited IPO is an IPO of up to 23,75,00,000 equity shares. It consists of an offer for sale of up to 23,75,00,000 equity shares. The shares will be allotted on TBA. The credit of shares to the demat account will take place on TBA and the initiation of refunds will take place on TBA.

Objective of Canara HSBC Life Insurance Company IPO

• To carry out the Offer for Sale of up to 23,75,00,000 Equity Shares of face value of ₹10 each by the Selling Shareholders.
• Achieve the benefits of listing the Equity Shares on the Stock Exchanges.
• Enhance visibility and brand image and provide liquidity and a public market for the Equity Shares in India.

Industry Outlook

Life insurance products primarily meet a variety of insurance needs, such as protection, savings, market-linked savings, pension, and health-related benefit requirements of customers, both individuals and groups. While the industry witnessed sequential growth declines in new business premium during Q4 of fiscal 2020, Q1 of fiscal 2021, and Q1 of fiscal 2022 due to Covid-19, the year-on-year growth in total premium remained unaffected in fiscal 2021 and 2022. The industry grew at 9.7% and 10.2% year-on-year in fiscal 2021 and 2022 respectively. The strong recovery in fiscal 2022 indicates a perceptible shift in attitude and awareness towards life insurance. The financial impact of the pandemic also led people to value the protection and fallback offered by life insurance products in tough times. The total premium growth for bank-led life insurers in fiscal 2021 and 2022 was 16.4% and 15.7% respectively on a year-on-year basis, whereas the same for non-bank-led players was higher at 17.0% and 23.0% in fiscal 2021 and 2022 respectively. The total sum assured under the individual life insurance business is approximately ₹22,17,000 crore for fiscal 2024 in India, which is around 75% of India’s GDP (at current prices). The sum assured for individual insurance increased at 12.3% CAGR during fiscal 2017 to fiscal 2024.

Company Information

Canara HSBC Life Insurance Company Limited is a private life insurer in India, promoted by Canara Bank (which ranks as the fourth-largest public sector bank by total assets in India as on 31 December 2024 (Source: CRISIL Report)) and HSBC Insurance (Asia-Pacific) Holdings Limited, a member of The Hongkong and Shanghai Banking Corporation Limited (“HSBC”) group, whose global reputation as a financial institution adds credibility and brand value to them. They offer a comprehensive range of life insurance products tailored for both individual and group (i.e., companies, businesses, or organisations) customers. Their offerings primarily include savings and endowment plans, term (pure protection) plans, retirement solutions, group credit life and protection plans, and the Pradhan Mantri Jeevan Jyoti Bima Yojana (“PMJJBY”). They also deliver options such as multiple payout choices, investment management flexibility, and the ability to customise through a breadth of plan and fund offerings, including limited pay annuity plans and over ten fund choices in unit-linked products.

Risks of Canara HSBC Life Insurance Company IPO

• Fluctuations in interest rates could significantly and negatively impact their profitability. Furthermore, the Indian capital markets offer a limited variety and quantity of long-term fixed income products. Legal and regulatory restrictions on the types and amounts of investments allowed for insurance entities may constrain their ability to closely align the tenure of their assets with their liabilities.

Interest rates are highly volatile, influenced by factors such as monetary and tax policies, economic and political variables both domestically and internationally, including the Reserve Bank of India's monetary policies and government fiscal policies, balance of payments, inflationary pressures, fiscal deficits, trade imbalances, regulatory demands, and other factors beyond their control.

• Catastrophic events, such as natural or man-made disasters, which are often unpredictable, may materially and adversely affect their claims experience, investment portfolio, financial condition, and results of operations.

Even though their business is conducted in India, the threat of epidemics, international tensions in many parts of the world, terrorism, ongoing and future military and other actions, heightened security measures in response to these threats, natural disasters, climate change, or other catastrophes may cause disruptions to commerce and reduce economic activity and increase market volatility.

• Failures of, or inadequacies in, their information technology systems, including risks due to software bugs, computer virus attacks, malware, and cybersecurity attacks, could have a material adverse effect on their business, financial condition, results of operations, and cash flows.

A partial or complete failure of any information technology or communications systems could hinder or delay critical business functions, resulting in the loss of key business information and customer data, or lead to regulatory non-compliance.

Anchor Investor Information

The Anchor Investor Bid/Offer Period shall be one Working Day prior to the Bid/Offer Opening Date.

IPO Registrar and Book Running Lead Managers

Book running lead managers:

SBI Capital Markets Limited
BNP Paribas
HSBC Securities & Capital Markets (India) Private Limited
JM Financial Limited
Motilal Oswal Investment Advisors Limited

Registrar for the IPO is KFin Technologies Limited

Business Model

The company earns its revenue through the following source:

• Offering a comprehensive range of life insurance products tailored for both individuals and groups (i.e., companies, businesses, or organisations). Their offerings primarily include savings and endowment plans, term (pure protection) plans, retirement solutions, group credit life and protection plans, and the Pradhan Mantri Jeevan Jyoti Bima Yojana (“PMJJBY”).

Company Growth Trajectory

Their Annualised Premium Equivalent (APE) has consistently grown, reflecting their efforts to expand their products and services and increase their market presence. Their profit after tax increased at a CAGR of 232.61% from ₹10.24 crore in fiscal 2022 to ₹113.32 crore in fiscal 2024, and was ₹84.89 crore in the nine months that ended on 31 December 2024. Furthermore, their Embedded Value (as defined below) increased from ₹4,271.94 crore as on 31 March 2023, to ₹5,179.86 crore as on 31 March 2024, and further increased to ₹5,929.52 crore as on 31 December 2024. (Source: EV Report) Financially, they are well capitalised, with a solvency ratio of 215.00% in the nine months ended 31 December 2024, which surpasses the regulatory requirement of 150.00%, thus indicating their sound fiscal management and ability to meet obligations.

Company Market Position

Incorporated in 2007, they have grown into a prominent bank-led private player in the Indian life insurance sector, ranking second amongst public sector bank-led life insurers in India based on the number of lives covered for fiscal 2024 (Source: CRISIL Report). Their individual weighted premium income (WPI) (NBP) collected grew the third highest amongst bank-led insurers between fiscal 2021 and 2024, and recorded the highest year-on-year growth amongst their peer set for the nine months that ended on 31 December 2024 (Source: CRISIL Report). They had the third-highest assets under management (AUM) amongst public sector-promoted bank-led life insurers as at 31 March 2024 (Source: CRISIL Report), and they rank amongst the top five bank-led life insurers in India based on the number of lives covered for fiscal 2024 (Source: CRISIL Report). They were one of the life insurers to report the fastest three consecutive years of profit from the first year of operation amongst their peer set, and were amongst the fastest life insurers to generate profits within five years of operations (Source: CRISIL Report).

How To Check Allotment Status of Canara HSBC Life Insurance Company IPO?

You can check the allotment status of shares either on the website of the National Stock Exchange (NSE) or on the website of the registrar KFin Technologies Limited.

To check the status on the NSE website:

• Visit the NSE website
• Click on “Investor Services” and choose “Application Status Check”
• Choose the issue type — Equity or Debt (Equity in this case)
• Select the Issue Name from the drop-down. The issue name is the company’s name, which is Canara HSBC Life Insurance Company Limited
• Enter your application number or PAN number
• Check the box which says “I’m not a Robot” and click on “Search” to know the allotment status

Follow these steps to know the allotment status on the registrar’s website:

• Visit the KFin Technologies Limited website
• Choose “Public Issues” from the “Investor Services” drop-down
• Select Canara HSBC Life Insurance Company Limited from the drop-down
• Enter your PAN number or Application number
• Click on “Submit” to know the allotment status

How to Apply forCanara HSBC Life Insurance Company IPO?

To apply for this IPO:

• Step 1: Log in to your Kotak Securities Demat account: Log in to your Demat account to access IPO investments. Next, select the current IPO section
• Step 2: Specify IPO details: Enter the number of lots and the price you wish to apply for
• Step 3: Enter UPI ID: After entering your UPI ID, click submit. This will place your bid with the exchange
• Step 4: Mandate Notification: Your UPI app will receive a mandate notification to block funds
• Step 5: Approve Request: Your funds will be blocked once you approve the mandate request on your UPI