Canara Robeco AMC IPO: An Upcoming Financial Opportunity!

Canara Bank has obtained 'in-principle' approval to list its mutual fund subsidiary, Canara Robeco Asset Management Co., through an initial public offering (IPO). This step is taken to bring the mutual fund subsidiary to the stock exchanges, as officially stated in a recent filing by the company.

Canara Robeco AMC Background

Canbank Mutual Fund, which is now recognized as Canara Robeco Mutual Fund, was founded in 1993. In 2007, Canara Bank formed a partnership with the Robeco Group, resulting in the fund being renamed Canara Robeco Mutual Fund.

Canara Bank has approved the initiation of the Canara Robeco AMC IPO listing process on stock exchanges. However, the actual listing is contingent on due diligence, and the details of the listing process will be decided later, according to the official statement.

In November 2023, Canara Robeco Mutual Fund managed assets worth Rs 78,398.51 crore. Opting to become a public company is a big move, positioning it as the fifth mutual fund to enter the Indian stock market, alongside established names like HDFC AMC, UTI Asset Management Company, Nippon Life India AMC, and Aditya Birla Sun Life AMC.

Canara Bank Performance

Canara Bank delivered a robust performance in the second quarter of the financial year 2023-24. Its net profit surged by 42.8% to ₹3,606 crore, as opposed to ₹2,525.5 crore in the corresponding period last year.

The bank's earnings from interest, known as net interest income, increased by almost 20%, reaching ₹8,903 crore. They also improved how efficiently they use their resources, with the net interest margin growing to 3.02%. Additionally, the bank reduced its cost-to-income ratio by 53 basis points, now at 43.68%.

Canara Bank's stock has been consistently growing, reflecting positive trends over various periods. In the last month, it increased by 9.13%, suggesting a recent upward trend. Over a broader span of 6 months, the stock surged by 45.73%. In past year, the stock rose by 36.74%, indicating the bank's steady performance. Taking a long-term view, the stock has shown a gain of 55.79% over the past 5 years.

Final Word

Canara Bank's green light for the listing of Canara Robeco AMC IPO is a strategic step. Investors are closely watching as the due diligence process advances, expecting the entry of Canara Robeco Mutual Fund into the Indian stock market.