The countdown has begun for one of India’s biggest public issues of the year.
SBI Funds Management, the asset manager behind SBI Mutual Fund, will open its Rs 9,812.9 crore initial public offering (IPO) on July 14.
As investors are set to monitor the subscription numbers and issue details closely, many might also be looking at the company’s performance in the grey market.
SBI Mutual Fund IPO GMP: What does the trend indicate?
The SBI Funds Management IPO Grey Market Premium (GMP) is hovering around Rs 89-91. This, as of now indicates a listing premium of nearly 15-16% over the upper price band of Rs 574.
However, it is important to understand that GMP is an unofficial market indicator and should not be treated as a guarantee of listing gains
Why was the SBI Funds IPO size reduced?
Ahead of the IPO opening, the company also revised the size of the public issue.
State Bank of India and Amundi India Holding sold around 3.27 crore shares through a pre-IPO placement to 30 institutional investors.
Following this transaction, the IPO size was reduced from Rs 11,692.91 crore to about Rs 9,812.9 crore.
Importantly, the price band remains unchanged at Rs 545-574 per share.
Since the issue is entirely an Offer for Sale (OFS), SBI Funds Management itself will not receive any money from the IPO. The proceeds will go to the existing shareholders selling their stake.
SBI Funds IPO: What are experts saying?
Arihant Capital believes SBI Funds Management continues to benefit from India’s growing mutual fund industry and its strong distribution network through State Bank of India.
According to the brokerage, the company manages assets worth Rs 12.51 lakh crore, making it India’s largest asset manager by Assets Under Management (AUM). It also noted that revenue increased from Rs 3,426 crore in FY24 to Rs 4,976 crore in FY26, while Profit After Tax (PAT) rose around 21% year-on-year.
The brokerage firm added, “At the upper band of Rs 574, the issue is valued at a P/E of 38.1x on FY26 EPS of INR 15.06 (P/B of 19.6x), broadly in line with or at a discount to larger listed peers, supported by its dominant franchise and superior return ratios. We recommend a “subscribe for long term” rating.”
Geetanjali Kedia, Chief Analyst at SP Tulsian Investment Advisers, said, “SBI Funds Management’s profitability is lower than ICICI Prudential’s. While it will be compared with peers like ICICI Prudential and HDFC AMC, its profit yield, measured as Profit After Tax (PAT) divided by Assets Under Management (AUM), is lower than ICICI Prudential’s. However, the pricing has factored this in, and the IPO has been priced at a discount to ICICI Prudential. I believe the discount is adequate, and the pricing is attractive. Given the attractive valuation, I also expect a listing-day pop.”
Disclaimer: Investment in the primary market involves risks, and information regarding Grey Market Premium (GMP) is an unofficial indicator that does not guarantee listing performance. This analysis of the SBI Funds Management IPO includes brokerage views and financial data for informational purposes only and should not be construed as a direct offer or solicitation to invest. Prospective investors should review the Red Herring Prospectus (RHP) carefully and consult a SEBI-registered investment advisor to evaluate suitability based on individual financial objectives. This disclaimer has been generated using AI to support user well-being and responsible content consumption.