Canara Robeco IPO: Canara Robeco Asset Management Company, the mutual fund arm of state-run lender Canara Bank, has filed draft papers for its initial public offering (IPO) with the capital markets regulator Securities & Exchange Board of India (SEBI).
Canara Robeco IPO will be completely an offer for sale (OFS) of 4.98 crore equity shares by promoters with no fresh issue component, according to the Draft Red Herring Prospectus (DRHP).
Under the OFS, Canara Bank is set to divest 2.59 crore equity shares, while ORIX Corporation Europe N.V. (formerly known as Robeco Groep N.V.) plans to sell 2.39 crore shares.
Canara Bank possesses a 51% interest in Canara Robeco Asset Management Company, whereas Orix Corporation controls the rest of the ownership in the AMC.
Since the IPO is entirely an OFS, the company will not receive any funds from the public issue, and the proceeds will go to the selling shareholders.
Canara Bank Likely to Get Around ₹500 Crore
Canara Robeco IPO is estimated to be around ₹800-1,000 crore, according to media reports and talks on Dalal Street. As Canara Bank is selling around 52% of the OFS shares, the lender is estimated to receive approximately ₹500 crore from the public issue.
Additionally, Canara HSBC Life Insurance Company has also filed a DRHP with SEBI for an IPO, which is again entirely an OFS.
The OFS includes up to 13,77,50,000 shares by Canara Bank, up to 47.50 lakh shares by HSBC Insurance (Asia-Pacific) Holdings Limited, and up to 9.50 crore shares by Punjab National Bank.
Canara Bank Could Fetch ₹2,200 crore from Canara HSBC Life IPO
The IPO could be valued around ₹16,500 crore, with Canara Bank expected to raise approximately ₹2,200 crore from its stake sale, according to Vaibhav Vidwani, Research Analyst at Bonanza Group.
Experts debate if investing in Canara Bank shares ahead of Canara Robeco IPO would be a tactical decision or not.
Is it wise to buy Canara Bank shares?
Seema Srivastava, Senior Research Analyst at SMC Global Securities explained that investing in Canara Bank shares ahead of the Canara Robeco AMC IPO could be a strategic move, given the bank’s stake sale in the AMC would lead to raising of significant capital which can be utilise to strengthen the lender’s balance sheet.
Canara Robeco IPO, being a 100% OFS, means the Canara Bank will receive the proceeds from the IPO, which will help strengthen its balance sheet and improving its capital adequacy ratio.
“This influx of capital can help Canara Bank expand its lending capacity, invest in growth initiatives, and reduce its dependence on external funding. With a stronger balance sheet, the bank can lower borrowing costs and enhance its overall financial stability,” Srivastava said.
According to her, with its strong fundamentals and growth potential, investing in Canara Bank shares ahead of the Canara Robeco AMC IPO can be a good investment strategy for long-term investors.
“The bank’s ability to drive growth initiatives and improve its financial health makes it an attractive investment opportunity. Overall, Canara Bank’s stake sale in Canara Robeco AMC is likely to have a positive impact on its balance sheet and growth prospects, making it a good investment option for those looking to invest in the banking sector. By investing in Canara Bank shares, investors can benefit from the bank’s strong market presence and growth potential,” added Srivastava.
Meanwhile, Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities said that before considering if investing in Canara Bank shares ahead of Canara Robeco IPO is a wise investment strategy, investors should understand that Canara Bank is trying to monetise its investment in Canara Robeco AMC, and potentially projecting it as an unlocking value for shareholders.
“Given that the parent owns ~51% stake in the AMC business can influence the bank’s valuation as a one-time benefit, which can also be discounted in the current price. More upside in the strategy could come depending on many factors like IPO market momentum, peer valuations and overall market sentiments. On the risk part, delay in IPO process due to regulatory approvals can reduce the strategy return expectations,” Tapse said.
As of date, there are four AMC listed stocks for reference on valuations – HDFC AMC, Nippon Life India Asset Management, UTI AMC & Aditya Birla Sun Life AMC – trading in the range as high as 11.5x and as low as 3x, based on price-to-book (P/B) value comparison, he noted.
“Considering the AUM size of Canara Robeco AMC, which is approximately ₹1 lakh crore as of FY25, we can assume the IPO price should be in the valuation range of ~3-7x P/BV. However, it is too early to conclude this will be a wise investment strategy,” advised Tapse.
Canara Bank Shares: Technical Outlook
On the technical charts, the trend for Canara Bank shares remains bullish.
“Canara Bank witnessed a breakout from an Inverse Head and Shoulders pattern on 17th April 2025, supported by rising volumes—indicating a potential shift in trend. Post-breakout, the stock is currently experiencing a throwback move, which is a typical retest of the neckline. A bounce is anticipated from the neckline level, which also coincides with the 50 EMA, reinforcing the zone as a strong support area,” said Kunal Kamble, Sr. Technical Research Analyst at Bonanza Group.
“The stock is trading above the 50 EMA, a sign of a positive trend, and reflects continued bullish sentiment, he added. Meanwhile, the RSI had entered the overbought zone, triggering some profit booking,” Kamble added.
Despite the short-term pullback, the overall trend remains intact as long as the stock sustains above the ₹90 level, he opined.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
