All eyes are on the SBI Funds Management IPO listing in a short while from now. Meanwhile the State Bank of India (SBI) is set to receive about Rs 5,711 crore from the initial public offering of SBI Funds Management after the asset manager fixed the issue price at Rs 574 per share. The proceeds will accrue entirely to the country’s largest lender as the IPO is an offer for sale, with SBI selling 99.5 million shares, equivalent to approximately 4.89% of the company’s equity.
SBI accounts for more than half of the offer
At the issue price of Rs 574 a share, SBI’s sale of 99,501,649 shares translates into proceeds of about Rs 5,711 crore.
The bank is the largest selling shareholder in the IPO. Its joint venture partner, Amundi India Holding, is selling 71,454,982 shares, which works out to about Rs 4,102 crore at the same price.
Together, the two shareholders are selling 170.96 million shares, taking the total offer size to nearly Rs 9,813 crore.
No fresh capital for the mutual fund business
The transaction does not involve the issuance of new shares by SBI Funds Management. Since the IPO is structured entirely as an offer for sale, the money raised will go to the existing shareholders selling their stake rather than to the asset management company.
According to the prospectus filed with the Registrar of Companies, State Bank of India is divesting 4.89% of the company’s paid-up equity capital through the issue.
IPO pricing completed ahead of allotment
SBI informed the stock exchanges that SBI Funds Management filed its final prospectus after completing the pricing process. The offer price has been fixed at Rs 574 per equity share, while eligible employees have been offered a discount of Rs 54 per share.
The filing also stated that the expected date of allotment is July 20, 2026.
SBI Funds Management: A look at financials
The filing shows SBI Funds Management reported total income of Rs 4,969.09 crore for FY26. This represented about 0.70% of the SBI group’s total income.
The company had reserves and surplus of Rs 3,533.09 crore at the end of FY26, equivalent to around 0.59% of the group’s reserves and surplus.
The disclosure also said the transaction does not involve a related-party transaction, a slump sale or a scheme of arrangement.
Conclusion
The pricing of the IPO locks in proceeds of about Rs 5,711 crore for SBI from the sale of its stake in SBI Funds Management. With the issue structured entirely as an offer for sale, the cash generated from SBI’s stake sale will flow to the bank, while the asset management company will not receive fresh capital from the public issue.