Canara HSBC Life gets thumbs-up after steady post-IPO run; analysts see growth runway

Canara HSBC Life Insurance target price: Domestic brokerage firms, including Motilal Oswal Financial Services (MOSFL) and Nirmal Bang Institutional Equities have shown fresh interest in recently list Canara HSBC Life Insurance Company Ltd and have initiated coverage on the stock.

Brokerage firms are positive on Canara HSBC Life Insurance's position among India’s top-10 life insurers, supported by a diversified product mix and a bancassurance-led distribution model. They believe that it has consistently outperformed the industry with strong APE growth and market-share gains.

Analysts highlight the insurer’s diversified product mix, bancassurance-led distribution, low penetration within Canara Bank’s large customer base, and rising HSBC contribution. Both expect 20 per cent APE CAGR, expanding VNB margins, improving market share, and healthy solvency over FY25–28E.

Over the past decade, Canara HSBC Life Insurance has outperformed the private and overall industry and gaining market share by 90 basis points within the industry and 110 basis points in the private segment, said Motilal Oswal, which believes the industry is positioned for strong growth, supported by increasing penetration, GST exemption, a narrowing protection gap.

Motilal Oswal sees it continuing to gain market share by increasing penetration among Canara Bank customers, scaling cross-selling in the HSBC channel, building a strong agency channel and developing relationships with distributors. HSBC’s expansion and retail focus are expected to further grow the profitable client base. MOSFL sees the product mix to shift to a 40:60 linked/non-linked ratio.

Adding to this, Nirmal Bang highlights its diversified product mix, with ULIP/NonPar/Par/Protection accounting for 50 per cent, 34 per cent, 8 v, and 8 per cent respectively in 1HFY26. Bancassurance is the main channel, with Canara Bank and HSBC contributing 70 per cent and 15 per cent of business.

Canara HSBC Life Insurance raised a total of Rs 2,518 crore via IPO in October 2025 as the company sold its shares of Rs 106 apiece with a lot size of 140 equity shares. The stock was listed on a flat note but has been marching higher post listing.

Within this context, Canara HSBC Life is expected to gain market share by deepening penetration among Canara Bank customers, enhancing cross-selling via HSBC, building its agency network, and expanding relationships with new distributors, notes Nirmal Bang. Canara Bank’s investments in digital segmentation tools are expected to support the insurance major's growth.

HSBC’s 13 per cent contribution to FY25 individual APE and a 19 per cent CAGR (FY22-25) provides access to high-value clients, including NRIs, affluent segments, and employer-employee groups. HSBC’s expansion and retail focus are expected to further enhance its client base, said Nirmal Bang.

Shares of Canara HSBC Life Insurance Company rose more than a per cent to Rs 143.80 on Wednesday, commanding a total market capitalization of more than 13,600 crore. Even after a 10 per cent from its all-time high at Rs 157.15. The stock is still up 36 per cent from its IPO price.

"For FY25-28E, Motilal Oswal projects a 20 per cent CAGR in APE and 23 per cent CAGR in VNB for Canara HSBC Life Insurance. VNB margins are expected to expand by 50 basis points per year, with operating RoEV likely above 17 per cent and solvency over 200 per cent. It is valued at 1.7 times FY28E P/EV, with a target price of Rs 180," adds Motilal with a 'buy' rating in IC report.

VNB margins are likely to expand by 50 bps each year, supported by a favourable product mix and scale, partially offset by agency channel investments. Operating RoEV is expected to remain above 17 per cent and solvency above 200 per cent. It is valued at 1.7 times FY28E price/embedded value, with a target price of Rs 180," it added with a 'buy' tag.