SBI Funds Management IPO opens at ₹545-₹574. Brokerages recommend Subscribe citing market leadership and strong parentage; valuation at 38x P/E is below peers.
SBI Funds Management, the joint venture between State Bank of India and Amundi, opened its initial public offering Monday at a price band of ₹545 to ₹574 a share. The offering closes July 16. Parents SBI and Amundi are selling 20.37 crore shares in a full offer for sale.
Brokerages have largely recommended subscribing. Anand Rathi, Arihant Capital, Chola Securities, and SMIFS each assigned a "Subscribe" rating. They cite the AMC's position as India's largest asset manager by quarterly average AUM. The AMC holds a 15.3% market share with ₹12.5 lakh crore in QAAUM.
At the upper price band, the post-issue P/E is 38.1 times FY26 earnings. That is below the average of 41.64 times for listed peers, according to one brokerage. Chola Securities noted HDFC AMC trades at 41 times, ICICI Prudential AMC at 48 times, and Nippon Life India AMC at 51 times.
SBI Funds Management runs an asset-light business with an EBITDA margin of 79% and a return on equity of 51%. HDFC AMC and Nippon Life India AMC report ROEs of 33% and 35% respectively. The AMC's SIP franchise and diversified product mix–equity, debt, hybrid, passive, and overseas funds–are key advantages.
The main risk is AUM-linked revenue. Equity market volatility, regulatory changes, or investor outflows could pressure fee income. The issue offers no fresh capital.
Anand Rathi highlighted the asset-light, fee-based model across mutual funds, PMS, AIFs, and advisory mandates. SMIFS called the 38-39 times P/E a premium in absolute terms. The firm added that the valuation is reasonable given durable earnings and high ROE. Arihant Capital said the valuation is broadly in line with or at a discount to larger listed peers. Chola Securities pointed to the competitive edge from SBI's branch network, especially in B-30 cities.
Active MF QAAUM grew at a CAGR of 22% from FY24 to FY26, according to one estimate. The cost-to-income ratio is 20%. SMIFS based its valuation on FY26 PAT of ₹30,674 million.
The IPO closes July 16. Allocation is 50% for qualified institutional buyers, 35% for retail, and 15% for non-institutional investors. Employees get a ₹54 per share discount on a ₹170 crore reserved portion. Eligible SBI shareholders have a reserved quota.
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