Canara HSBC Life Insurance IPO: Reviving investors' entry to bank-led private life insurer after eight years

Canara HSBC Life Insurance Company Limited, a leading bank-led private life insurer in India, presents a rare opportunity for investors to participate in a long-term compounding story, as this marks the first listing of a private life insurer in eight years. Additionally, the recent GST cut on life insurance enhances affordability, combined with reasonable pricing, which sets up attractive long-term upside potential.

With a strategy focused on a well-diversified product portfolio and strong distribution, the company is currently valued at a P/EV (Price to Embedded Value) multiple of 1.6x (FY25) at an upper price band of Rs 106, which appears attractive in comparison to industry peers, indicating potential undervaluation with high dependence on bancassurance and relatively lower VNB margins compared to peers.

Further, the Company is promoted by Canara Bank, which holds a 51% stake, and HSBC Insurance (Asia-Pacific) Holdings Limited, which holds a 26% stake. Thus, backed by the strong parentage of Canara Bank and HSBC, the company exhibits solid fundamentals, including growing VNB and a consistently high claim settlement ratio. Its diverse product mix and multi-channel distribution network support sustained growth.

On the financial front, the company has demonstrated steady value creation, as reflected in the consistent growth of its Embedded Value (EV) rising from Rs. 42,719.3 million in FY23 to Rs. 51,798.6 million in FY24, and further to Rs. 61,107.4 million in FY25, with an additional uptick to Rs. 63,526.4 million as of June 30, 2025, reports says.

This sustained increase underscores the company’s strong operational performance, profitable business growth, and disciplined capital management, reinforcing its long-term shareholder value creation potential. Additionally, with 10.5 million lives covered, the company demonstrates a broad customer base and deep market reach, underscoring the trust and confidence policyholders place in its life insurance offerings.

Canara HSBC Life Insurance has developed a strong reputation for customer-centric solutions, regulatory compliance, and sound corporate governance. Its risk management and actuarial practices are designed to ensure long-term sustainability. The company has also been strengthening its digital initiatives, improving customer engagement, and enhancing operational efficiency to meet evolving market demands, said Ventura in its IPO note.

Moving ahead, with recent regulatory and consistent access across India via 15,700+ partner branches, the company intends to improve distribution efficiency and customer proximity. The company intends to expand its product portfolio, deepen penetration through bancassurance, and scale up digital platforms. The predominant bancassurance model helps keep acquisition and servicing costs lean, enabling better value for customers and healthier unit economics. Therefore, with strong promoters, rising profitability, and a trusted brand name, Canara HSBC Life Insurance is well-positioned to capitalize on India’s growing life insurance market.

(No ET Now Journalists are involved in creation of this article.)

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