Investec Securities has initiated coverage on Canara HSBC Life Insurance Company with a 'Buy' rating, setting a price target of ₹225 per share. The brokerage firm's positive recommendation reflects its confidence in the insurance company's business fundamentals and growth potential.

Analyst Recommendation Details

The research initiation by Investec marks a significant development for the mid-cap insurance stock. The firm's analysis has resulted in an optimistic outlook on the company's prospects in the competitive life insurance sector.

Company Profile

Canara HSBC Life Insurance Company operates as a joint venture in India's life insurance market. The company is classified as a mid-cap stock with a market capitalization of ₹11,661.20 crore. The stock trades on both NSE and BSE exchanges, offering investors multiple avenues for participation.

Market Context

The initiation of coverage by Investec provides investors with additional research perspective on the insurance sector. The 'Buy' rating suggests the brokerage sees potential value in the current market positioning of Canara HSBC Life Insurance Company.

Canara HSBC Life Insurance Company Limited has informed stock exchanges about receiving a significant GST demand order from tax authorities in Uttar Pradesh. The regulatory disclosure was made pursuant to SEBI listing regulations.

GST Demand Details

The company received a GST demand order of ₹3.46 crores from UP authorities for FY 2021-22. The order covers tax, interest, and penalties.

Allegations and Violations

The GST authorities have raised the demand based on three primary allegations for Financial Year 2021-22:

1. ITC Claims: Input Tax Credit claimed from GSTR-3B for cancelled dealers
2. Zero-rated Supplies: Supplies not properly substantiated as zero-rated
3. ULIP Charges: GST not charged on income reported in Table 5(O) of GSTR-9C on account of Unit Linked Insurance Plan charges

Company's Response and Impact Assessment

Canara HSBC Life Insurance Company has stated that, based on its assessment, the GST demand is not maintainable. The company plans to file an appeal before the competent authority or appellate tribunal in accordance with applicable provisions under the Goods and Services Tax Act.

Regarding the financial impact, the company has indicated that it does not envisage any relevant impact on its financials, operations, or other activities from this demand order.

Regulatory Compliance

The disclosure was made under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has also uploaded the details on its website and informed both NSE and BSE about the development through proper regulatory channels.