SBI MF IPO to open on Tuesday, fund house hopes issue will bring investors back

SBI Funds Management, the asset management company of SBI Mutual Fund, on Monday expressed confidence that its upcoming initial public offering (IPO) will bolster market sentiment. The fund house also announced plans to sharpen its focus on scaling up its institutional fund management vertical.

The IPO is opens on Tuesday and closes on July 16 with a price band of ₹545–574 per share with a face value of Re 1. Through the offer for sale (OFS), it aims to mop up around ₹10,000 crore. Under the IPO, while SBI will offload 6.3 per cent of its holding, the joint venture partner Amundi will sell 3.7 per cent of its holding Following the IPO, SBI’s holding will decline to 55.46 per cent and Amundi’s stake to 32.56 per cent.

The issue size was earlier planned at ₹11,693 crore but was reduced after SBI last week raised ₹1,655 crore from a group of investors. At the higher end of the price band, the company is valued at ₹1.2 lakh crore.

“Amid global uncertainties, trust is certain,” Debasish Mishra, MD & CEO of SBI Funds Management, said in a briefing here while responding a query on launching IPO amid current volatility in the market.

He also hoped that this IPO will boost the sentiment in the market. “We want to bring confidence in the market,” he said, while adding that the fund aims to become fund manager of every Indian.

He also expressed confidence that the offering will revive investor interest and pave the way for more public issues

“The IPO market has been dry due to geopolitical uncertainties, so someone had to take the responsibility. We are confident our issue will bring investors back to the market,” Mishra said.

Echoing a similar view, Joint CEO DP Singh said the offering is expected to encourage more companies to tap the primary market.

SBI Mutual Fund provides Portfolio Management Services (PMS) and Alternate Investment Fund (AIF) under the institutional fund management business. “Beyond mutual funds which are bread and butter, we would like to grow substantially into PMS and expand international investment...with Amundi, we will penetrate markets across the world...So, PMS, international and alternates will be our priority in addition to mutual funds,” Mishra said.

On AIF, he said, the company is going to build more capability and is contemplating a special situation fund. The company is also looking at the private equity space, he said, adding, so “you will see a lot of products on the AIF side.”.