The countdown has begun for one of India’s biggest public issues of the year. SBI Funds Management, the country’s largest asset management company by quarterly average assets under management, is all set to open its Rs 11,692.91 crore Initial Public Offering (IPO) on July 14.
While investors are closely tracking the price band, subscription dates and listing prospects, another question has started drawing attention: How much are the two promoters – State Bank of India (SBI) and Amundi India Holding likely to earn by selling part of their stake?
The answer lies in the structure of the IPO. Moreover, this issue is entirely an Offer for Sale (OFS). That means the money raised will go directly to the existing shareholders selling their shares, while SBI Funds Management itself will not receive any proceeds from the issue.
An offer for sale means promoters receive the money
The IPO comprises 20.37 crore equity shares, all of which are being sold by the existing promoters.
The company has fixed a price band of Rs 545-574 per share. The final amount that the promoters receive will depend on the final issue price discovered through the book-building process.
SBI Funds Management IPO: Who is selling how much?
The share sale is divided between the two promoters, with SBI accounting for the larger portion of the issue.
| Promoter | Shares offered | Share of IPO |
| State Bank of India (SBI) | 12.83 crore | ~63% |
| Amundi India Holding | 7.54 crore | ~37% |
| Total | 20.37 crore | 100% |
SBI Funds Management IPO: How much could SBI receive?
State Bank of India is selling up to 12.83 crore shares through the IPO.
Based on the announced price band, SBI could receive between Rs 6,994.22 crore at the lower end of the price band and Rs 7,366.39 crore if the shares are priced at the upper end.
One reason the potential gain is substantial is the bank’s extremely low acquisition cost. According to the offer documents, SBI’s weighted average cost of acquiring these shares is Rs 0.15 per share.
This means SBI’s acquisition cost for the shares being sold is only around Rs 1.93 crore. Before accounting for taxes and issue-related expenses, the estimated gain works out to nearly Rs 6,992 crore to Rs 7,364 crore, depending on the final issue price.
SBI Funds Management IPO: How much will Amundi India Holding earn?
The second promoter, Amundi India Holding, is offering 7.54 crore shares in the IPO.
At the lower end of the price band, the sale could fetch approximately Rs 4,107.93 crore. If the issue is priced at Rs 574, the proceeds could increase to around Rs 4,326.52 crore.
Unlike SBI, Amundi’s acquisition cost is higher but still relatively low compared to the IPO price. The weighted average acquisition cost stands at Rs 4.35 per share, taking the total acquisition cost of the shares being sold to around Rs 32.79 crore.
Based on this, the estimated pre-tax gain could range between Rs 4,075 crore and Rs 4,294 crore, before deducting taxes and issue-related expenses.
| Promoter | Gross proceeds (Rs 545) | Gross proceeds (Rs 574) | Estimated pre-tax gain |
| SBI | Rs 6,994.22 crore | Rs 7,366.39 crore | Rs 6,992–7,364 crore |
| Amundi India Holding | Rs 4,107.93 crore | Rs 4,326.52 crore | Rs 4,075–4,294 crore |
SBI Funds Management: Will the promoters continue to retain control?
Although both shareholders are selling a sizeable number of shares, the IPO does not result in either promoter exiting the business.
Before the issue, SBI owns around 61.86% of the company, while Amundi India Holding holds approximately 36.33%.
Even after the Offer for Sale, both will continue to remain the company’s principal shareholders and retain significant ownership.
What investors should keep in mind
The IPO is expected to attract investor attention. This is because of SBI Funds Management’s leadership in India’s mutual fund industry.
However, investors should remember that the issue is purely an Offer for Sale. This means that the company will not receive fresh capital for expansion.
Disclaimer: Investment in the primary market involves systematic risks. This article covers an upcoming initial public offering (IPO) that is structured purely as an Offer for Sale (OFS), meaning no new capital is being raised for corporate expansion. The financial data, price bands, and promotional acquisition costs mentioned are for illustrative and news reporting purposes only and do not constitute an offer, buy/sell solicitation, or direct investment advice. Prospective retail investors must read the Red Herring Prospectus (RHP) carefully and consult a SEBI-registered investment advisor to evaluate personal financial allocations before subscribing.