October 8, 2025
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Review of Canara HSBC Life Insurance Co.IPO
Canara HSBC Life Insurance Company Ltd., incorporated in 2007, is a joint venture between Canara Bank and HSBC Insurance (Asia-Pacific). It is among the leading bancassurance-driven private insurers in India, with a strong presence across individual, group, pension, and government-linked schemes. Its portfolio comprises 20 individual products and 7 group solutions, distributed primarily through Canara Bank, HSBC, 8 Regional Rural Banks, and Dhanlaxmi Bank, enabling access to more than 15,700 branches and 117 million Canara Bank customers.
On the financial front, the company reported assets of Rs. 44,047.98 crore as of June 30, 2025, and a PAT of Rs. 23.41 crore in Q1 FY26. While the business has shown steady growth, profitability remains moderate, reflected in a RoNW of 7.97%, compared with stronger peers such as SBI Life (15.13%) and HDFC Life (11.75%). At a P/E of 81.3, valuations appear stretched on conventional metrics; however, this is not the most appropriate lens for life insurance companies.
In insurance, the Price-to-Embedded Value (P/EV) ratio is a more accurate measure. On this basis, the IPO appears attractively priced. At the upper price band, Canara HSBC Life Insurance is valued at a P/EV of 1.59, which is lower than HDFC Life (3.01), SBI Life (2.48), and ICICI Prudential Life (1.74). This indicates that, despite a modest grey market premium (GMP), the stock offers significant scope for upside on listing and in the medium term.
Additionally, the IPO provides exposure to India’s underpenetrated life insurance sector, where long-term growth prospects remain robust. Backed by strong promoters and a powerful bancassurance network, the issue looks well-positioned for steady growth.
Verdict: Apply – Suitable for long-term investors seeking financial sector diversification, with potential for attractive listing gains.
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