Yesterday, the Board of Punjab National Bank (PNB) gave its approval for initiating the process to dilute 10% stake in Canara HSBC Life Insurance Company by listing the insurer through an initial public offer.

Canara HSBC Life Insurance Company is a joint venture promoted by Canara Bank (51%) and HSBC Insurance (Asia Pacific) Holdings (26%). PNB holds 23% as an investor.

This announcement comes close on the heels of Canara Bank according approval for initiating the process of diluting 14.50% stake in the insurer.

This is now subject to approval of Reserve Bank of India and Department of Financial Services, Government of India. The size of the issue, opportune time and modalities of issue will be decided in due course.

PNB stock price, initially reacted positively, opening over 2.5% higher at Rs.118.05 and went on to Rs.119.10 but soon the rally fizzled out on profit booking and slipped into the red at Rs.110.55 and is now trading 2.6% lower at Rs.112.25.