Canara HSBC Life banks on new agency, digital channels for next leg of growth amid IPO launch

Canara HSBC Life IPO

Canara HSBC Life Insurance, which opens its Rs 2,517-crore initial public offering (IPO) on October 9, is looking to expand beyond its bank-led model into agency and digital distribution channels to power the next leg of growth, said Anuj Mathur, CEO.

Speaking to Moneycontrol, Mathur said the life insurer has rolled out its own agency and digital channels to reduce its heavy reliance on bancassurance.

“Our distribution arrangements with our partner banks are long term, with the latest renewal happened in 2023 and runs till 2033," the CEO said. “But we’re consciously diversifying. We’re looking to actively expand our agency channel and are expanding digital and alternate channels, including defence and direct-selling partners.”

Currently, over 90 percent of Canara HSBC Life’s business comes through bancassurance. Of this, Canara Bank contributes around 70 percent, HSBC 13–15 percent, and Punjab National Bank, the rest.

Unlike many peers that have tapped the market for growth capital, Canara HSBC Life has no plans to raise additional funds post-listing, the CEO said.

Mathur said the insurer’s future expansion, including new channels and product development, will be fully funded through internal accruals.

“In our case, we are well-capitalised with a solvency ratio above 200 percent,” he said. “All our new distribution initiatives will be funded through internal accruals and the profitability generated within the group. We don’t require any external capital infusion at this stage.”

The listing comes at a time when the life insurance IPO market has been quiet, with HDFC Life was the last private insurer to go public in 2017. The company believes policy tailwinds, such as the recent GST cut on insurance premiums, have created a conducive environment for sectoral growth.

“We are in a position where we have a long runway ahead to capitalise on this and reach more customers,” Mathur said. “This is a good time to look for wider investor participation, and as a company, we’re on strong footing to pursue greater visibility.”

Canara HSBC Life’s product mix is gradually rebalancing after a strong year for unit-linked insurance plans (ULIPs), supported by buoyant equity markets.

With the GST rate cut expected to improve affordability, traditional and protection products are likely to gain momentum.

“As markets stabilize, we see more balanced growth,” the spokesperson said. “Given our large semi-urban and rural base, traditional and guaranteed-return products will gain share.”

As of June 2025, the insurer’s assets under management (AUM) stood at about Rs 43,600 crore, growing roughly 16 percent year-on-year.

About 25 percent of the company’s capital will be offered to investors. Post-listing, Canara Bank’s stake will reduce from 51 percent to 36.5 percent, Punjab National Bank’s from 23 percent to 13 percent, and HSBC’s from 26 percent to 25.5 percent.

The issue will close on October 14, with the price band fixed between Rs 100 and Rs 106 per share.