SBI Funds lists below grey market, analysts back upside
SBI Funds Management made a muted market debut despite strong analyst support, leaving new investors on the sidelines while existing allottees are advised to hold for long-term gains from India's financialisation trend.
SBI Funds Management listed on the BSE at Rs 610, a 6.27% premium to its IPO price of Rs 574. The debut gave the asset manager a market capitalisation of Rs 1.24 lakh crore. However, this fell short of the 16-18% premium anticipated by unlisted grey market trading ahead of the float.
The Rs 9,795 crore offering was entirely an offer for sale of 17.10 crore shares by existing shareholders State Bank of India and Amundi. Because there was no fresh issue of shares, the asset manager received no proceeds from the IPO.
Despite the muted listing, brokerages see long-term value. Emkay Global Financial Services initiated coverage with a buy rating and a target price of Rs 750, citing expectations for a 17% EBITDA CAGR over FY26-29 driven by operating leverage. “As the savings and investment needs of Indians evolve, the middle class is increasingly embracing mutual funds as its core investment vehicle, and SBI AMC has all the ingredients to become ‘the asset manager to every Indian,’ just as its parent has become ‘the banker to every Indian’,” Emkay said.
Equirus Securities issued a long rating with a March 2027 target of Rs 675. The brokerage pointed to the firm's sticky SIP flows, scale, and significant under-penetration within the SBI bank channel. Both firms argue the company is well positioned to capture India's shift of household savings into market-linked products, supported by a move toward higher-yielding equity and alternate investments.
For market participants, the immediate strategy depends on the entry point. Geetanjali Kedia of SPTulsian Investment Advisers noted short-term investors might consider booking profits for upcoming IPOs. Long-term allottees are generally advised to hold the stock given its strong margins, leadership in the segment, and growth prospects.
New buyers, however, should exercise caution given the debut valuation. “However, fresh investors should avoid chasing the stock at elevated post-listing levels,” said Vaqarjaved Khan, senior fundamental analyst at Angel One.
