Canara HSBC Life Insurance Company has launched its Initial Public Offering (IPO) on 10 October, with a price band ranging from INR 100 to INR 106 per equity share. The insurer aims to raise up to INR 2,516 crore through a complete offer for sale (OFS) by its shareholders. As the company prepares for its stock market debut, a closer look at its valuation reveals a compelling growth story, strong parentage, and robust financial metrics that position it favorably against its listed peers.
Strong Foundation and Consistent Growth
Established in 2007, Canara HSBC Life Insurance is a joint venture between two banking giants, Canara Bank and HSBC. This powerful backing provides a significant competitive advantage through an extensive bancassurance network, which remains the company’s core channel accounting for 92.33% of its new business premium (NBP) as of 30 June 2025, with access to over 15,700 branches across India. The partnership with Canara Bank alone provides a gateway to 11.7 crore customers through 9,849 branches.
The company has demonstrated consistent and profitable financial performance. Its PAT has grown at a CAGR of 13.26% from INR 91.19 crore in Fiscal 2023 to INR 116.98 crore in Fiscal 2025. This steady growth is also reflected in the increase of its Embedded Value (EV), a key metric for insurance companies, which rose from INR 4,271.94 crore as of 31 March 2023, to INR 6,110.74 crore as of 31 March 2025. For the quarter ended 30 June 2025, the EV stood at INR 6,352.64 crore.
Valuation in a Competitive Landscape
As life insurance is a long term business and company receives premium from customers over a long period of time, along with current year profits, investors should also look into growth in embedded value ( EV) ( RoEV), EV multiple, which is current market cap / current or latest EV, growth in VNB (Value of New Business) margins, etc.
Basis the above, if we compare listed players like ICICI Pru, HDFC Life and SBI life EV multiple and the EV multiple of Canara HSBC LI which is around 1.6, then it is very very reasonably priced. P/E ratio is dependent upon many factors which are not truly reflecting the comparison and value. RoEV is showing how yoy EV is growing thus potential in increase in market cap, which is currently upward of 18% means potential of upward 18% growth.
At the upper end of the price band, the IPO values Canara HSBC Life Insurance at approximately INR 10,070 crore. The Price to Earnings (P/E) ratio, based on the diluted EPS for FY25, is 81.30 times at the upper price band. Which is at par with the industry average P/E of 79.37.
Canara HSBC’s P/E appears to be at a premium compared to some peers due its strong growth trajectory and operational efficiencies provide a solid justification. According to a CRISIL Report, the company’s individual weighted premium income (WPI) grew at the third-highest rate among bank-led insurers between Fiscal 2022 and 2025.
Future Outlook and Growth Potential
The Indian life insurance industry remains significantly underpenetrated compared to global averages, presenting a substantial growth opportunity. Canara HSBC Life is well-positioned to capitalize on this with its strategic focus on enhancing penetration in its existing distribution network and diversifying revenue streams. The company’s consistent improvement in persistency ratios, with the 13th-month persistency improving by over 900 bps over FY23, indicates a loyal customer base.
The company’s strong fundamentals, consistent growth, and significant market potential driven by its powerful parentage and distribution network present a compelling case for investors looking for a long-term investment in the burgeoning Indian insurance sector.
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