Canara HSBC IPO

Objects of the Offer

• Enhance penetration in our existing distribution network to facilitate growth.

• Strengthening our multi-channel distribution network to increase and diversify our revenue streams.

• Continued focus on customer centricity to improve customer satisfaction and retention.

• Continue to leverage technology and analytics to enhance productivity and efficiency to improve customer experience and manage risks.

• Ensure profitable growth through balanced product portfolio.

• Enhancing brand awareness and capturing growth opportunities through diversified marketing channels.

• We have an established parentage and a trusted brand amplifying customer attraction.

• We have a multi-channel distribution network with pan-India presence.

• We provide long term value creation driven by consistent and profitable financial performance.

• We have a diversified product portfolio with a focus on customer centricity enabling growth across business cycles.

• We have a technology integrated business platform with strong focus on automation and digital analytics leading to prudent risk management framework.

• We have experienced management team supported by a team of dedicated professionals.

• Any termination of, or adverse change in, our bancassurance arrangements, and in particular our distribution agreement, as amended, with our Promoter, Canara Bank, or one of our group companies, HSBC India, or decline in performance standards of our bancassurance partners, may have a material adverse effect on our business, results of operations and financial condition.

• Adverse variation in persistency metrics or adverse persistency metrics as well as concentrated surrenders by customers may have a material adverse effect on our financial condition, results of operations and cash flows.

• Our Company operates in a complex regulatory environment, and any adverse changes to these regulations or failure to comply with the requirements could disrupt our business operations or expose us to significant penalties.

• We may be unable to implement our strategies for growth and create appropriate products for specific customer segments and distribute them through our distribution channels. Additionally, our inability to maintain historical growth rates may result in these rates not being indicative of future growth.

• Our Company is subject to periodic inspections by the Insurance Regulatory and Development Authority ("IRDAI"). Inspection by the IRDAI is a regular exercise for all insurance companies and we may be subject to inspections from the IRDAI in the future. Non-compliance with the IRDAI`s observations could subject us to penal action, which could adversely affect our business, financial condition, results of operations, cash flows and reputation.

• Our solvency ratio for the three months ended June 30, 2025, June 30, 2024 and Fiscals 2025, 2024 and 2023 was 200.42%, 223.82%, 205.82%, 212.83% and 251.81%, respectively against the regulatory requirement of at least 150.00%. Our solvency ratio has decreased in the last three fiscal years primarily due to an increase in new business volumes and change in product mix. If we do not meet solvency ratio requirements, we may be subject to regulatory actions and could be forced to raise additional capital. We may also need additional capital in the future, and we cannot assure investors that we will be able to obtain such capital on acceptable terms or at all.

• We use the logo of Canara Bank and HSBC Group Management Services Limited, in connection with carrying on our business in India through license agreements. If these agreements are terminated or we are unable to renew these agreements in a timely manner on commercially viable terms, or at all, our business, financial condition, cash flows and results of operations may be adversely affected.

• We have generated negative cash flows from operating activities in the past, and any negative cash flows from operating activities in the future would adversely affect our cash flow requirements, which may adversely affect our ability to operate our business and implement our growth plans, thereby affecting our financial condition.

• The determination of the Price Band is based on various factors and assumptions and the Offer Price of the Equity Shares, price to earnings ratio based on the Offer Price of the Equity Shares may not be indicative of the market price of the Equity Shares after the Offer. Further, the current market price of some securities listed pursuant to certain previous issues managed by the Book Running Lead Managers is below their respective issue prices.

• The Restated Financial Information included in this Red Herring Prospectus are provided by our Erstwhile Joint Statutory Auditors.

• A significant proportion of our new business premium is generated by non-participating products, although participating products continue to contribute to a portion of our revenues. Any significant regulatory changes or market developments that adversely affect sales of such products could have a material adverse effect on our business, financial condition, results of operations and cash flows and may also require us to make changes to our existing product designs.

• Fluctuations in interest rates could significantly and negatively impact our profitability. Furthermore, the Indian capital markets offer a limited variety and quantity of long-term fixed income products. Legal and regulatory restrictions on the types and amounts of investments allowed for insurance entities may constrain our ability to closely align the tenure of our assets with our liabilities.

• We may be unable to adequately hedge the risks arising out of our guaranteed return products.

• If actual claims experienced and other parameters such as including but not limited to expenses and commissions are different from the assumptions used by us in pricing and setting reserves for our products, it could have a material adverse effect on our business, financial condition and results of operations.

• While one of our Promoters, Canara Bank, will cease to hold a majority interest in our Company upon completion of the Offer, our Promoters will continue to retain a significant shareholding in our Company after the Offer, which will allow them to exercise influence over us. Any substantial change in our Promoters` shareholding, or change in their shareholding in our Company, may have an impact on the trading price of our Equity Shares, our revenue through bancassurance channel, business, financial condition, results of operations and cash flows.

• There is significant technical complexity involved in embedded value calculations and the estimates used in the Embedded Value Report could vary materially if key assumptions are changed or if our experience differs from our assumptions used to calculate our Embedded Value. In addition, there may be a risk that the model used to calculate Embedded Value itself may not be appropriate despite taking due care to ensure that models are appropriate. Our value of new business ("VNB") may vary as future experience may be different from the assumptions used in calculating our VNB and may not be comparable to similar information reported by our peers.

• We rely on the accuracy and completeness of information collected from customers and counterparties. Failure to verify the accuracy and completeness of such information in underwriting, claims handling and automation may expose us to risks like fraud and misrepresentation, adversely impacting our business, financial condition, and results of operations.

• Catastrophic events, such as natural or man-made disasters, which are often unpredictable, may materially and adversely affect our claims experience, investment portfolio, financial condition and results of operations.

• Our business may be adversely affected if we are unable to obtain regulatory approvals or licenses in the future or maintain or renew our existing regulatory approvals or licenses.

• The risk management tools at our disposal, along with our policies, procedures and internal controls, may not be effective or adequate in identifying, responding to, and mitigating risks under varying market conditions and unforeseen circumstances.

• Failure to retain, maintain or secure new distribution relationships, as well as any termination or disruption of our existing distribution relationships, may have a material adverse effect on our competitiveness and result in a material impact on our financial condition and results of operations.

• We may be unable to obtain external reinsurance on a timely basis at reasonable costs and are exposed to concentration risk with individual reinsurers. We also face the risk that reinsurers may be unable to fulfil their payment obligations.

• We may not be able to detect, in a timely manner, or prevent fraud or misconduct. Any misconduct or fraudulent activities, whether actual or alleged, carried out by our employees, agents, or other distribution partners could result in customer claims and regulatory actions against us. This may necessitate compensating customers for such fraudulent acts, incurring penalties, facing regulatory constraints on our operations or similar repercussions, and suffering damage to our reputation, all of which could adversely affect our business, prospects, financial condition and results of operations.

• Failures of or inadequacies, in our information technology systems, including risks due to software bugs, computer virus attacks, malware and cybersecurity attacks, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

• One of our group companies, HSBC InvestDirect Securities (India) Private Limited, has incurred losses, which may have an adverse effect on our reputation and business.

• The handling, transmission, and storage of confidential customer information are integral to our business. Any failure to adequately protect this information could breach data privacy laws and regulations, resulting in reputational damage and financial liabilities, potentially having a significant negative impact on our business, financial condition, results of operations and cash flows.

• We depend on our leadership and key management and our actuarial, information technology, investment management, finance, underwriting and other personnel, and our business would suffer if we lose their services and are unable to adequately replace them.

• Our business reputation is critical to maintaining market share and growing our business and any adverse publicity regarding us or our Promoters and investors may have a material adverse effect on our business, prospects, financial condition and results of operations.

• The actuarial valuations of policies with outstanding liabilities are not required to be audited and if such valuation is incorrect, it could have an adverse effect on our business, financial condition and results of operations.

• Our investments are subject to credit risks, concentration risks, market risks and liquidity risks, which could have a material adverse effect on our financial condition, results of operations and cash flows.

• Customer preferences and market trends for life insurance and pension products may change, and we may be unable to respond appropriately or in time to sustain our business or our market share in the markets in which we operate.

• A significant portion of our new business premium from individual products in India is concentrated in certain states. Any significant reduction in new business premiums of individual products from any of these states could have a material adverse effect on our business, financial condition, results of operations and cash flows.

• Our ability to access capital at attractive costs depends on our credit ratings. Non-availability of credit ratings or a poor rating may restrict our access to capital and thereby adversely affect our business, financial conditions, cash flows and results of operations.

• Some of our corporate records are not traceable. We cannot assure that regulatory proceedings or actions will not be initiated against us in the future and that we will not be subject to any penalty imposed by the competent regulatory authority in this regard.

• The rate of growth of the life insurance industry in India may not be as high or as sustainable as we anticipate.

• Grants of stock options under our employee stock option scheme may impact our profit and loss account (shareholders` account / non-technical account) and, to that extent, adversely affect our business, financial condition, results of operations and prospects.

• We may offer products pursuant to government policies and schemes and may in turn be subject to limitations on pricing and premiums.

• There are pending litigations against our Company, certain of our Promoters and Directors. Any adverse outcome in such proceedings may have an adverse impact on our reputation, business, financial condition, results of operations and cash flows.

• Our value of new business margin is lower than that of our peers and there can be no assurance of future growth.

• We face significant competition and our business, financial condition, results of operations and cash flows could be materially harmed if we are unable to compete effectively.

• We rely on third-party service providers in several areas of our operations and hence do not have full control over the services provided to us or our customers. Further, if these service provider relationships are terminated for any reason, our business and prospects may be adversely affected.

• If we are unable to protect our intellectual property and proprietary information, or if we infringe the intellectual property rights of others, our business, financial condition, cash flows and results of operations may be adversely affected. Defending intellectual property claims may be expensive and could divert valuable resources.

• Our registered office, corporate office and branches are leased from third parties. If we are unable to renew or extend such leases, our operations may be adversely affected.

• Customer complaints arising due to service quality issues or any other reason, and any future increase in such complaints, may negatively impact our reputation, cash flows and financial condition.

• Any inaccurate or delayed payment of claims may have a negative impact on our business, financial condition, results of operations, and prospects.

• We have certain contingent liabilities of Rs.3,198.89 million as at June 30, 2025, that have not been provided for in our financial statements, which if they materialise, may adversely affect our financial condition. These contingent liabilities represent 20.77% of our net worth as at June 30, 2025.

• We may undertake strategic investments or divestments, acquisitions and joint ventures, which may not perform in line with our expectations.

• Our Promoters have interests in us other than reimbursement of expenses incurred or normal remuneration or benefits.

• Certain of our Directors, KMPs and members of Senior Management are interested in our Company, in addition to regular remuneration or benefits and reimbursement of expenses.

• We may not be able to grow our emerging distribution platforms in order to diversify our distribution mix, and in particular, we may not be able to develop our digital modes in the event of changes in search engine logic or regulations of search engines.

• Consolidation of distributors of insurance, investment and pension products may have a material adverse effect on the insurance industry and the profitability of our business.

• Some of our distribution partners, including corporate agents, insurance brokers and distributors, may not have obtained the requisite qualifications, licenses or registrations.

• Our ability to pay dividends in the future will depend upon our future results of operations, financial condition, cash flows and working capital and capital expenditure requirements.

• Our financial statements differ significantly from financial statements prepared by non-insurance companies.

• Our Joint Statutory Auditors are currently appointed by the Comptroller and Auditor-General of India ("CA&G") and will hold office until completion of the ensuing annual general meeting.

• Changes in the accounting standards used in the reporting of our Restated Financial Information due to new pronouncements, such as Ind AS, interpretations, migration to new standards or even due to our own decision to change accounting policies may significantly affect our financial statements for future years, and may materially and adversely affect our financial condition and results of operations.

• We may suffer uninsured losses or suffer material losses in excess of insurance coverage which may adversely affect our business, results of operations, cash flows and financial condition.

• This Red Herring Prospectus contains information from third parties, including an industry report prepared by an independent third-party research agency, CRISIL Intelligence (formerly known as CRISIL Market Intelligence & Analytics), division of CRISIL Limited, which we have commissioned and paid for to confirm our understanding of our industry exclusively in connection with the Offer and reliance on such information for making an investment decision in the Offer is subject to inherent risks.

• We have entered into, and will continue to enter into, related party transactions that may involve conflicts of interest. There can be no assurance that we could not have achieved more favorable terms had such transactions not been entered into with related parties.

• Our Company will not receive any proceeds from the Offer.

• Our Promoter, Canara Bank is a listed entity and any violation of rules and regulations applicable to listed companies by our Promoter, Canara Bank may adversely impact our business, reputation, results of operation, cash flows and financial condition.

• HSBC Securities and Capital Markets (India) Private Limited, one of the Book Running Lead Managers to the Offer, is an associate of HSBC Insurance (Asia-Pacific) Holdings Limited, one of our Promoters who is also proposing to participate as a Selling Shareholder in the Offer.

• We have in this Red Herring Prospectus included certain non-generally accepted accounting measures ("GAAP") and certain other industry measures related to our operations and financial performance. These non-GAAP measures and industry measures may vary from any standard methodology that is applicable across the industry in which we operate, and therefore may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companies.

• Significant differences exist between Indian GAAP and other accounting principles, such as U.S. GAAP and IFRS, which investors may be more familiar with and may consider material to their assessment of our financial condition.