Bank of India (BOI) is considering listing its mutual fund and life insurance arms as the first candidates for potential market listing, similar to other public sector banks like State Bank of India and Canara Bank, which have already explored or initiated IPO plans for their subsidiaries.
“We do see our mutual fund and insurance subsidiaries as the most likely to be off the block when the time is right,” said Rajneesh Karnatak, MD & CEO of Bank of India. “But not in this financial year. Our focus right now is on growing these platforms organically, expanding distribution, and ensuring they are strategically aligned with our core banking business.”
In June this year, the finance ministry had asked public sector banks (PSBs) to look at monetising their investment in subsidiaries by listing them at bourses after further scaling up operations so that they realise a good return. BOI is taking a more measured approach, prioritising scale and value before stepping into the capital markets.
Mutual Fund & Insurance Business Snapshot
As on July 2025, BOI Mutual Fund, a wholly owned subsidiary of BOI, has an asset under management of Rs 13,183 crore with 7,62,969 investor folios across 20 equity, hybrid, and debt funds. In Star Union Daiichi, the life insurance arm BOI holds a 27.5% stake. For FY25, the life insurance earned a net premium income of Rs 8,033 crore. As on July 2025, the life insurance company, in terms of first premium, enjoyed a market share of 3.25% among private insurers.
“Our subsidiaries are not just ancillary businesses for us, they are strategic levers that complement our core banking operations and help us offer a full-spectrum financial ecosystem to our customers. Both mutual fund and life insurance are integral to our cross-sell strategy and customer engagement model,” said Karnatak. “We are not rushing to list these subsidiaries just to unlock short-term value. Our focus is on building embedded value first, expanding distribution, improving profitability, and strengthening operational metrics. Once we reach a threshold where the businesses are mature and scalable, we will consider listing them,” he adds.
Focus on Long-Term Value Creation
BOI is leveraging its mutual fund and insurance arms to deepen customer engagement by bundling products with salary accounts, housing loans, and wealth offerings and driving cross-sell across its 5,300-branch network. Says Karnatak, “Product bundling has been a game-changer. Offering 3-in-1 accounts and wealth products has increased average balances by over 2.5 times than a simple standalone savings account. We have seen clear growth in product-per-customer metrics.”
BOI aims to organically grow its mutual fund and life insurance business, deepen its integration with the bank, and ensure meaningful contributions to its consolidated performance. It has already infused the required regulatory capital into both entities and does not anticipate further investment in the near term. “We’re building long-term value. Once the scale is in place, the market will recognise the strength of these businesses,” said Karnatak.