The much-awaited SBI Funds Management IPO opened for subscription on Tuesday, drawing healthy investor interest. As of the latest data at 12:40 pm, the Rs 9,813 crore public issue has been subscribed 35%, with bids received for 12.45 crore shares on offer.
Retail investors have shown slightly stronger participation, subscribing 37% of the 5.42 crore shares reserved for the category.
Adding to the optimism, the IPO is also witnessing positive traction in the grey market, commanding a Grey Market Premium (GMP) of around 16%, indicating expectations of a healthy listing, subject to market conditions.
The public issue will remain open for subscription until July 16. SBI Funds Management has fixed the price band at Rs 545–574 per share. Investors can apply for a minimum lot of 26 shares and in multiples thereafter.
At the upper end of the price band, a single retail application will require an investment of Rs 14,924.
The IPO is entirely an Offer for Sale (OFS) comprising 17.10 crore shares being sold by State Bank of India and Amundi. Since there is no fresh issue of shares, the company will not receive any proceeds from the IPO. Instead, the entire amount raised will go to the existing selling shareholders.
According to Anand Rathi, the issue size at the upper price band stands at Rs 98,129 million (approximately Rs 9,813 crore), with no fresh capital infusion into the company.
Following the completion of the IPO, the combined holding of the promoter and promoter group is expected to decline to 89.8% from the current 98.2%. Consequently, the public shareholding will increase to 10.2%, improving the stock's free float.
The basis of allotment is expected to be finalized on July 17, 2026, while the shares are proposed to be listed on both the BSE and the NSE.
Subscription Status (Day 1, 12:40 pm):
The SBI Funds Management IPO witnessed a steady start, with the issue garnering an overall subscription of 35% against the 12.45 crore shares on offer.
Retail Individual Investors (RIIs): Subscribed 37% of the 5.41 crore shares reserved for the category.
Non-Institutional Investors (NIIs): Led the demand, subscribing 55% of the 2.31 crore shares on offer.
Qualified Institutional Buyers (QIBs): Received bids for 6% of the 2.31 crore shares reserved for the category.
SBI MF IPO GMP
The grey market premium (GMP) for the SBI MF IPO stands at around 16% or Rs 92 per share over the upper price band of Rs 574, indicating healthy listing expectations. Based on the current GMP, the shares are expected to list at around Rs 666.
While the GMP is an unofficial market indicator and can fluctuate sharply before listing, the current premium reflects strong investor sentiment towards the country's largest mutual fund house.
Broker recommendations
Nirmal Bang has given a "Subscribe" rating to the IPO from a medium- to long-term perspective. It said that the market leadership, distribution strength, healthy profitability and favourable industry outlook support the issue.
Anand Rathi has also recommended "Subscribe". The brokerage said the IPO is fully priced, but SBI Funds Management’s leadership, asset-light model, SBI-Amundi parentage and retail investor base support the offer.
SBI MF: India's largest AMC
SBI Funds Management is the investment manager to SBI Mutual Fund. It is India’s largest AMC by mutual fund quarterly average assets under management, with QAAUM of Rs 12.5 lakh crore and a 15.3% market share as of March 2026.
The company is promoted by State Bank of India and Amundi. SBI gives it access to a large banking and distribution network, while Amundi brings global asset management experience. Nirmal Bang said SBI MF offers 128 mutual fund schemes across equity, debt, hybrid, ETFs, index funds and overseas funds, along with PMS, AIFs, SIFs and advisory mandates.
It also has a strong retail base. Anand Rathi said SBI Funds Management had 17.95 million individual investors and 16.21 million live SIP accounts as of March 2026. Its total QAAUM, including PMS and other advisory mandates, stood at Rs 29.46 lakh crore.
SIP and distribution strength
SBI Funds Management’s biggest advantage is its reach. Nirmal Bang said the company has an omnichannel distribution network of over 132,500 mutual fund distributors. It is present across 98.2% of India’s PIN codes and has an industry-leading B-30 franchise.
The company also has a large digital business. Nirmal Bang said SBI MF processed an average of 1.31 million transactions a month in FY26, with around 94.3% of transactions executed through digital channels. Its InvesTap app had 3.97 million registered users, 3.39 million active users and over 5.8 million downloads as of FY26.
SIP growth remains a key support for the company. Anand Rathi said SBI Funds Management had 16.2 million live SIPs in FY26, monthly SIP inflow of Rs 4,059 crore and SIP AUM of Rs 1.73 lakh crore.
SBI MF Financial performance and valuation
SBI Funds Management has shown steady growth in recent years. Revenue from operations rose to Rs 4,389 crore in FY26 from Rs 3,598 crore in FY25 and Rs 2,691 crore in FY24. Consolidated PAT increased to Rs 3,067 crore in FY26 from Rs 2,540 crore in FY25 and Rs 2,073 crore in FY24.
Profitability remains strong. EBITDA margin improved to 79.1% in FY26 from 77.1% in FY25 and 73.7% in FY24. Return on equity stood at 51.4% in FY26.
At the upper price band, the IPO values the company at 38.1 times FY26 earnings and 33.6 times EV/EBITDA. Nirmal Bang said the issue is available at a discount to ICICI Prudential AMC and HDFC AMC on these metrics.
Key risks for investors
The main risk is market-linked earnings. SBI Funds Management earns fees on AUM, which can move with equity and debt markets. A sharp market fall, weaker fund performance or higher redemptions can affect revenue and profit.
Competition is also rising. Nirmal Bang flagged pressure from large AMCs, ETFs, ULIPs, direct equity and new digital investment platforms. Fee pressure and higher distributor payouts may also become important over time.
The book-running lead managers include Kotak Mahindra Capital, Axis Capital, BofA Securities India, HSBC Securities, ICICI Securities, Jefferies India, JM Financial, Motilal Oswal Investment Advisors and SBI Capital Markets. KFin Technologies is the registrar to the offer.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
