Management

• Satyanarayana Raju Kalidindi (Chairman and Non-Executive Director (nominated on the Board by Canara Bank)
• Anuj Dayal Mathur (Managing Director and Chief Executive Officer)
• Bhavendra Kumar (Non-Executive Director, nominated on the Board by Canara Bank)
• Santanu Kumar Majumdar (Non-Executive Director, nominated on the Board by Canara Bank)
• Edward Charles Lawrence Moncreiffe (Non-Executive Director, nominated on the Board by INAH)
• Amitabh Nevatia (Non-Executive Director, nominated on the Board by INAH)
• Supratim Bandyopadhyay (Independent Director)
•  Kishore Kumar Sansi (Independent Director)
• Geeta Mathur (Independent Director)
•  Suryanarayana Somayajula (Independent Director)
• Animesh Chauhan (Independent Director)
• Rabi Narayan Mishra (Independent Director)
• Tarun Rustagi (Chief Financial Officer)

Use of Proceeds

The total issue size is Rs. 2,517.50 cr, which entirely comprises of offer for sale (OFS) of Rs 2,517.50 cr. Canara HSBC Life Insurance Company will not receive any proceeds from the offer. It intends to utilize the net proceeds from the issue to carry out the offer for sale of up to 237,500,000 equity shares of face value of Rs 10 each and achieve the benefits of listing the equity shares on the stock exchanges.

Competitive Strengths

Established parentage and a trusted brand amplifying customer attraction Canara HSBC Life Insurance Company, promoted by Canara Bank holding 51% and HSBC Insurance (Asia-Pacific) Holdings Limited holding 26%, benefits from its strong parentage and global credibility. Canara Bank ranks as India’s fourth-largest public sector bank, while HSBC adds international strength and brand value. Their combined brand equity contributes significantly to business growth, accounting for over 80% of new business premiums in recent years. The company’s Net Promoter Score improved from 50 in FY23 to 75 in June 2025, supported by high service standards, a 99.38% claim settlement ratio, and the highest persistency improvement among bank-led insurers.

Multi-channel distribution network with pan-India presence The company maintains a diversified distribution model that includes bancassurance, brokers, corporate agents, and direct sales through digital platforms. Bancassurance remains its primary channel, leveraging partnerships with Canara Bank, HSBC, and seven regional rural banks, offering access to over 15,700 branches and 117 million customers across India. This extensive reach lowers infrastructure costs and strengthens customer access in Tier 1 to Tier 3 cities. Additionally, tie-ups with 13 insurance brokers and three corporate agents enhance digital and direct engagement. The distribution strategy ensures wide market penetration, scalability, and operational efficiency, contributing to sustained growth and profitability.

Long-term value creation driven by consistent and profitable financial performance Canara HSBC Life Insurance demonstrates consistent financial performance and long-term value creation. According to CRISIL, it was among the fastest life insurers to achieve consecutive profits early in its operations. Between FY23 and FY25, individual weighted premium income grew at a CAGR of 14.65%, while AUM increased by 16.74% to Rs 436,394.98 million. Embedded value rose from Rs 42,719 million in FY23 to Rs 63,526 million in June 2025, supported by strong capital efficiency and an operating RoEV of 19.53%. The company’s prudent asset management, with 97.32% of fixed income in AAA-rated instruments, and its solvency ratio of 2.06 times reflect strong financial stability.

Diversified product portfolio with a focus on customer centricity enabling growth across business cycles The insurer offers 20 individual, seven group products, and two optional riders catering to diverse customer needs across protection, savings, investment, and retirement. Its balanced portfolio ensures resilience across market cycles, with the total sum assured growing at a CAGR of 19% to Rs 4,124,907.98 million by FY25. Group credit life and corporate protection plans strengthen market presence, while digital initiatives reduced average claim settlement time to 5.33 days with a 99.38% settlement rate. The company’s focus on innovation and customer satisfaction has earned multiple awards, including “Life Insurance Company of the Year” in 2020 and 2024, and recognition for service excellence.

Technology integrated business platform with strong focus on automation and digital analytics leading to prudent risk management framework Technology and analytics remain central to Canara HSBC Life Insurance’s operations, enhancing efficiency and customer engagement. The company integrates AI, machine learning, and predictive analytics for underwriting, claims, and customer retention. Digital service requests rose to 87.08% in FY25, and turnaround time for servicing dropped to one day. Tools like “Compass” streamline sales, while “Saral Hire” improves recruitment efficiency. Automated underwriting and sentiment analysis further strengthen risk management. Recognized for innovation, it received “Fraud Prevention Insurance Company of the Year” and “Most Innovative Life Insurance Company” awards in 2025. A stable leadership team averaging 12 years of tenure ensures governance, continuity, and strategic execution.

Peer Comparison

Key Risks & Concerns

High dependence on banca channel pose concentration risk Bancassurance remains the company’s lifeline, contributing 87.07% of total new business premium as of FY25. Within this, Canara Bank alone accounted for 70.6%, while Canara Bank and HSBC India together made up 80.4%, highlighting a significant concentration risk. Any disruption, termination, or decline in performance of these bancassurance arrangements could materially impact business growth and operating performance.

Declining trend in solvency ratio warrants monitoring despite regulatory comfort The Company’s solvency ratio has consistently remained above the regulatory requirement of 150%, but has trended downward over the last three years—from 251.8% in FY23 to 205.8% in FY25, and further to 200.4% in Q1FY26. The decline has primarily been driven by rising new business volumes and a shift in product mix. While still comfortably above the minimum threshold, the sustained moderation highlights the need for close monitoring, with any future shortfall potentially requiring capital infusion. High Exposure to Unsecured Loans

Regulatory changes may impact business The life insurance sector is highly regulated, and any change in rules or frameworks can materially affect operations. Recent amendments to surrender norms may influence policyholder behavior and persistency. Further, the recent GST exemption on insurance premiums, while aimed at reducing costs for policyholders, has resulted in insurers losing input tax credit (ITC), thereby increasing opex. This raises execution and oversight challenges, impacting profitability and growth in near term.

Outlook and Valuation

Canara HSBC Life Insurance has delivered consistent financial growth supported by operational efficiency and prudent management. Assets under management grew at a two-year CAGR of 16.7% to Rs 43,639.5 crore by June 2025, while the Operating Expense to GWP ratio improved to 14.09% in Q1FY26 from 16.31% in FY24. The embedded value rose from Rs 4,271 crore in FY23 to Rs 6,110 crore in FY25, reflecting robust value creation and a healthy 19.53% operating RoEV. This growth was underpinned by a strong distribution network, improved persistency ratios, and technology-led efficiencies that reduced costs and strengthened long-term profitability across business segments.

The company benefits from a vast distribution network supported by strong promoter banks. Exclusive access to Canara Bank’s 11.7 crore customers and 9,849 branches, along with HSBC India’s 26 operational and 20 upcoming branches, provides a scalable base across India. Partnerships with seven regional rural banks further expand reach into semi-urban and rural markets, bringing total distribution access to over 15,700 branches nationwide. Additional tie-ups with 13 brokers, three corporate agents, digital platforms, and a defense-focused channel diversify revenue streams. This multi-channel strategy ensures deeper market penetration and customer access across varied demographics.

Canara HSBC Life Insurance is expected to sustain its growth trajectory through diversification, digital transformation, and product expansion. While bancassurance remains the dominant growth driver, the company is also increasingly investing in digital channels, brokers, and agency models to expand its market presence. High persistency ratios, strong claim settlement efficiency of 99.4%, and digital process integration enhance customer trust and service quality. Supported by Canara Bank and HSBC, the company is well-positioned to benefit from the projected 22%-25% CAGR growth in the life insurance industry between FY25 and FY28, ensuring continued profitability. It is interesting to observe how company is gaining its market share in the context of its considerable reliance on bancassurance and unit-linked insurance plans (ULIPs). Furthermore, the cost structure of its peers is lean. At the upper price band, the company is valued at 1QFY26 P/EV multiple of 1.6x.  Currently, investors can Avoid this issue and review it post listing.