SBI Funds Management IPO subscribed 0.71x on Day 1; NII portion leads demand, GMP signals 16% listing premium

The initial public offering (IPO) of SBI Funds Management, the country's largest asset management company (AMC), received a healthy response from all categories of investors on the first day of bidding.

By the end of Day 1, the issue was subscribed 0.71 times, with bids received for 8.79 crore shares against the 12.45 crore shares on offer, according to exchange data.

Among investor categories, the retail investor portion was subscribed 0.67 times, while the non-institutional investor (NII) segment was booked 1.40 times.

The qualified institutional buyer (QIB) portion was subscribed 0.08 times. Meanwhile, the employee portion witnessed strong demand and was fully subscribed by the end of the day.

Ahead of the IPO, SBI Funds Management raised ₹2,663 crore from anchor investors, with the issue attracting strong participation from global and domestic institutional investors. The company allotted 4.64 crore equity shares to 129 anchor investors at ₹574 per share, the upper end of the price band, according to a stock exchange filing.

The issue is entirely an Offer for Sale (OFS) of up to 17.09 crore equity shares by existing shareholders State Bank of India (SBI) and Amundi, aggregating up to ₹9,795 crore at the upper end of the price band. SBI will sell a 6.3% stake, while Amundi will divest 3.7%.

As the issue is entirely an OFS, SBI Funds Management will not receive any proceeds from the public offering, with the entire amount going to the selling shareholders.

The issue size was initially proposed at ₹11,693 crore but was subsequently reduced after the company completed a pre-IPO placement of around ₹1,880 crore.

Following the listing, SBI's stake will decline to 55.46% from 61.76%, while Amundi's holding will reduce to 32.56%.

The company has fixed the price band at ₹545- ₹575 per equity share of face value Re 1. At the upper end of the price band, SBI Funds Management is valued at around ₹1.16 lakh crore.

Established in 1992, SBI Funds Management, which manages SBI Mutual Fund, is India's largest asset management company by assets under management (AUM). It is a joint venture between State Bank of India and Amundi.

For FY26, the company reported a total income of ₹4,969 crore, accounting for 0.70% of the SBI Group's total income.

As of today, the grey market premium (GMP) for SBI Funds Management stood at ₹92 per share, indicating the stock could list above its issue price. Based on the prevailing GMP and the upper end of the price band, the estimated listing price is around ₹666 per share, implying a premium of nearly 16%.

The GMP reflects the difference between an IPO's issue price and its expected listing price in the unofficial market. However, investors should note that GMP is only an early indicator and should not be the sole basis for an investment decision.

Disclaimer: We advise investors to check with certified experts before making any investment decisions.