The State Bank of India (SBI) announced plans to take SBI Funds Management (SBIFML) – the biggest fund house with assets under management of Rs 12.05 trillion – public through an initial offering (IPO) on Thursday.
“The executive committee of the Central Board (ECCB) of SBI has accorded approval to divest 3,20,60,000 equity shares, (32 million) being equivalent to 6.3007% of total equity capital of SBI Funds Management Limited through Initial Public Offering, subject to all regulatory approvals,” the bank said in a stock exchange filing.
The IPO Framework Agreement is expected to be executed on November 10 and is expected to be completed in 2026, subject to approval by the Securities and Exchange Board of India.
SBIFML is a joint venture between SBI (61.91%) and French fund management firm Amundi India Holding 36.4%%. Amundi will sell 3.7% of its stake in the IPO. In total, 50.08 million shares and slightly over 10% will be offloaded.
“Considering SBIFML’s sustained strong performance and market leadership over the years, it is considered an opportune time to launch the IPO process, said SBI Chairman, C S Setty.
SBI Mutual Fund established in 1987 — the first non-UTI mutual fund in India – is the largest in the industry with 15.5% market share. Besides the mutual fund business, it also has Rs.16.32 trillion under alternates as on 30th September.
“SBI Funds Management has established itself as the leader. It has grown successfully, leveraging on the powerful distribution capacity of SBI’s network, combined with Amundi’s global expertise,” said Valérie Baudson, its Chief Executive Officer.
SBIFML will be the third subsidiary of SBI to be listed after SBI Cards and SBI Life Insurance. It is a good sign that the largest AMC in India is going public, said bankers. “It shows the confidence in the markets in the run up to mega issuances like Jio and NSE,” said a banker.
Another industry expert said the book running investment bankers are not appointed for SBI MF IPO, however the law firm Khaitan & Co is onboarded as legal advisor for SBI.
Given its leadership position, market experts expect SBIFML to get a valuation of around Rs 1 lakh. Its profits in FY25 were at Rs 2,531 crore, just slightly higher than the number three player – HDFC AMC’s Rs 2,461 crore (with assets under management of Rs 7.5 lakh crore in FY25). The latter’s current market capitalisation at Rs 1.15 lakh crore.
Other listed firms in the space are Nippon India, Aditya Birla AMC, Shriram AMC, Canara Robeco and UTI AMC. ICICI Prudential, the second biggest fund house, also plans to raise up to Rs 10,000 crore, through an offer for sale route.