The countdown for the SBI Funds Management IPO is gaining pace. The country’s largest asset management company, preparing for its stock market debut, does not own these trademarks.
It operates under a licensing arrangement for the ‘SBI’ brand name and logo. The company uses the brand name and logo following the SBI Trademark License Agreement dated March 29, 2012, and a supplementary agreement dated October 15, 2024.
What all is allowed under the agreement?
State Bank of India (SBI) has granted a non-exclusive, non-transferable licence to SBI Funds Management to use its registered trademarks and logo.
The licence allows the company to incorporate “SBI” into its corporate and brand names and use it on materials like stationery, promotional content, and digital platforms (websites/URLs).
In 2024, a supplementary agreement was signed, which extended these rights to SBI FM’s subsidiaries.
But this scheme asks SBI Funds Management to pay royalty to the parent bank for the use of this intellectual property.
The royalty is equal to 0.20% of total income or 2% of the net profit, whichever is higher, as per the DRHP.
These payments have accounted for an increasing percentage of the company’s total expenses:
SBI Funds Management Royalty payment
| Time | Royalty paid | % of total expenses |
| 9MFY26 | Rs 38.15 crore | 5.19% |
| FY25 | Rs 41.26 crore | 4.73% |
| FY24 | Rs 26.62crore | 3.54% |
| FY23 | Rs 21.41 crore | 3.34% |
SBI Funds Management: Logo termination and risk factors
The company’s ability to use the brand is not permanent and carries significant risks:
SBI can terminate the agreement if its group’s shareholding in SBIFM falls below 26%. SBI also reserves the right to terminate the agreement at any time by providing notice as per the contract terms.
The company is significantly dependent on the brand equity and customer trust associated with the SBI name; any loss of these rights would materially and adversely affect its business and results of operations.
Lastly, one of the biggest risks the company faces, as per the DRHP, is that its logo is not registered under the Trade Marks Act, 1999. It might be harder for the company to protect its visual identity from third parties who use it without permission or infringe upon it due to the lack of official registration.
SBI Funds Management, the investment manager of SBI Mutual Fund, is a joint venture between SBI and France-based Amundi. SBI holds a 61.98% stake in the company, while Amundi has 36.40%.
SBI Funds Management: IPO key details
Sebi has given its approval for SBI Mutual Fund’s IPO to sell shares worth an estimated Rs 13,000 crore, as per the news reports. The IPO is likely to hit the D-Street next month.
The IPO is entirely an offer for sale (OFS) of up to 20.37 crore equity shares and does not include any fresh issue.
The proposed offering will see existing shareholders, State Bank of India (SBI) and Amundi India Holding, dilute their stakes in the company.