SBI Funds Management launches ₹10,000 crore IPO
India's largest asset manager has launched a ₹10,000 crore offering, testing market appetite for premium-valuation financial assets amid strong institutional demand.
SBI Funds Management opened its initial public offering on Tuesday, aiming to raise nearly ₹10,000 crore through a complete sale of existing shares. The price band is set between ₹545 and ₹574 per share, with the subscription window closing on July 16.
The entire issue is an Offer for Sale by promoters State Bank of India and Amundi India Holding. SBI is divesting a 6.3% stake, equivalent to 12.83 crore shares, while Amundi is offloading 3.7%, or 7.54 crore shares.
Institutional investors have already shown strong interest ahead of the public subscription. On Monday, the asset manager raised ₹2,663 crore from anchor investors, allocating over 4.63 crore shares to 129 funds at the upper price band of ₹574.
The mainboard issue allocates 50% of shares to Qualified Institutional Buyers, 35% to retail investors, and 15% to non-institutional investors. Retail participation is further structured with a specific concession for existing SBI shareholders.
Investors who held SBI stock as of July 7 can apply under both the standard retail category and a dedicated shareholder quota of 1.3 crore shares. This mechanism effectively grants them two independent allotment chances, as the standard retail portion relies on a computerised lottery if oversubscribed, while the shareholder portion allocates on a proportionate basis.
SBI Funds Management commands a 15.3% market share of India's quarterly average assets under management as of March 31, 2026, making it the country's largest asset manager. At the upper price band, the offering implies a price-to-earnings ratio of 38.1 times and an EV/EBITDA of 33.6 times, resulting in a post-issue market capitalization of ₹11,69,139 million.
Brokerages view the valuation as full but justifiable given its scale. “At the upper price band, the company is valuing at P/E at 38.1x and EV/EBITDA of 33.6x with its FY26 earnings and market cap of ₹11,69,139 million post issue of equity shares. We believe that the IPO is fully priced and recommend a ‘Subscribe’ rating to the IPO,” said Anand Rathi.
The pricing represents a discount to listed domestic peers like ICICI Prudential AMC and HDFC AMC. Unofficial grey market activity reflects this optimism, with shares trading at a premium of ₹93, or 16.2%, above the upper issue price.
“Given its market leadership, strong distribution network, healthy profitability and favorable industry outlook, we assign a ‘Subscribe’ rating to the issue from a medium-to-long-term perspective,” said Nirmal Bang Securities. The offering's anchor success and grey market premium underscore sustained institutional appetite for India's mutual fund sector, even at elevated multiples.
