Canara Bank has set the ball rolling for stake sale in its life insurance and mutual fund subsidiaries, Canara HSBC Life Insurance Company and Canara Robeco AMC, through the IPO route. 

Canara Robeco AMC’s  initial public offering (IPO) is planned for launch in the fourth quarter of the current financial year.

“We will be diluting about 13% stake in Canara Robeco AMC. Our partner Robeco will also dilute a similar stake. We will continue to be the majority shareholder,” Canara Bank managing director and CEO K Satyanarayana Raju said.

Canara Bank has 51% stake in the mutual fund subsidiary while Robeco holds the remaining 49%.

“We have completed all the approvals. Only appointment of merchant bankers is in process. We expect to list the AMC in the fourth quarter of this fiscal,” said Raju.

In December, Canara Bank had given an in-principle approval to start the process of listing its mutual fund subsidiary by way of an initial share sale.

Raju said the listing of Canara HSBC Life Insurance is expected in the first quarter of the next financial year. The board is expected to meet on this within two months.

Canara Bank holds a 51% stake in the insurance company.

On 31 May, the lender approved a proposal to dilute 14.5% stake in the insurance arm through the IPO route.

At the end of June quarter, the insurance arm posted a total profit of Rs 18. 7 crore.

Canara Bank reported a 10.5% year-on-year rise in net profit at Rs 3,905.28 crore for the fiscal first quarter ended June.