Canara Bank shares in focus as PSU lender okays launch of Canara Robeco AMC IPO

Canara Bank shares will be in focus on Thursday morning after the PSU bank received an in principle approval to initiate the process of listing its mutual fund subsidiary Canara Robeco Asset Management Company Ltd, on stock exchanges by way of initial public offer (IPO). The modalities of listing, PSU lender said, would be decided in due course. 

The PSU bank will make further announcements of all material developments regarding the same, as and when required, as per applicable regulations. Canara Bank said the IPO listing will be subject to due diligence, laid down procedures, opportune time and regulatory approvals.

"We wish to inform you that Canara Bank has in principle approved to initiate the process of listing its Mutual Fund Subsidiary Canara Robeco Asset Management Company Ltd, in the Stock Exchanges by way of Initial Public Offer (IPO), subject to following the due diligence, laid down procedures, opportune time, regulatory approvals etc," Canara Bank said in a BSE filing.

Canara Robeco Mutual Fund is the second oldest mutual fund in India, established in December 1987 as Canbank Mutual Fund. In 2007, Canara Bank partnered with Robeco and the mutual fund was later renamed to Canara Robeco Mutual Fund. 

Shares of Canara Bank closed Wednesday’s session at Rs 432.40, up 1.73 per cent. The scrip has risen 28.63 per cent year-to-date. 

HDFC Institutional Equities in a note last month suggested that Canara Bank has seen strong improvement in the balance sheet in last couple of quarters and that its coverage on impaired loans has risen and capitalisation level reached at a healthy level post the recent fund raising. It cited lower fresh non-performing assets and higher focus on CASA ratio etc. 

“Further, underwriting practices have improved as observed from the rising share of the retail segment and incremental corporate lending done to better rated corporates. Lower slippages along with healthy rate of recoveries are helping the bank reduce credit cost which ultimately results in increased RoA,” it noted in a November 15 note.