Should you subscribe to the SBI Funds IPO? Here’s what brokerages say

SBI Funds Management is launching its IPO today for the public with a price band of ₹545 to ₹574 a share.

SBI Funds ‌is a joint venture between the country’s largest lender, State Bank of India and Europe’s largest asset manager, Amundi. SBI and Amundi are offloading a total of 20.37 crore shares in the offering. The IPO is open until July 16. Up to 50% of the issue is reserved for Qualified Institutional Buyers (QIBs), 35 per cent to Retail Investors and 15 per cent to Non-Institutional Investors/HNIs. The IPO also features a specific reserved quota for eligible State Bank of India shareholders. It has also reserved shares worth ₹170 crore for eligible employees, who will receive a discount of ₹54 a share while bidding for the IPO. The lot size is 26 shares.

At the upper price band of ₹574, the IPO is valued at a post-issue P/E of 38.12x FY26 EPS, which appears fully priced relative to peers. However, supported by its market leadership, strong sponsor backing, expanding retail penetration, continued investments in digital capabilities, growing passive and alternative product offerings, and increasing international presence, we believe the company is well positioned to capitalise on the structural growth of India’s asset management industry. Accordingly, we recommend a ‘Subscribe’ rating for medium to long-term investors.

Key Risks ● The company’s revenue and profitability are directly linked to assets under management (AUM), making earnings sensitive to equity market volatility, adverse capital market conditions, regulatory risks, investor outflows and changes in fund mix, which could impact fee income and overall financial performance.

Anand Rathi highlights that the company operates an asset-light, fee-based business model through the management of mutual funds, Portfolio Management Services (PMS), Alternative Investment Funds (AIFs), Specialised Investment Funds (SIFs) and advisory mandates across equity, debt, hybrid, passive and overseas investment products.

On the valuation front, at the upper price band, the company is valued at a P/E of 38.1 times. It recommends a “Subscribe” rating to the IPO.

Arihant Capital highlights that the company is India’s largest asset management company (AMC) by quarterly average mutual fund assets under management (QAAUM).

On the valuation front, at the upper price band, the issue is valued at a P/E of 38.1 times, broadly in line with or at a discount to larger listed peers, supported by its dominant franchise and superior return ratios. It recommends a “subscribe for long term” rating.

Chola Securities highlights that the company benefits from the strong SBI franchise, which provides a significant competitive advantage through access to SBI’s extensive branch network, large customer base, and strong brand credibility, supporting customer acquisition and asset mobilisation, particularly in Beyond Top 30 (B-30) cities.

On the valuation front, it is fairly valued at 38 times FY26 earnings, compared with listed peers such as HDFC AMC (41 times), ICICI Prudential AMC (48 times), and Nippon Life India AMC (51 times), considering its AUM growth prospects and revenue yield profile relative to peers. It has a “SUBSCRIBE” rating.

SMIFS Limited highlights that the company combines SBI’s unmatched domestic reach with Amundi’s global asset-management expertise.

On the valuation front, using FY26 profit after tax (PAT) of ₹30,673.76 million, the implied P/E is approximately 38 to 39 times FY26 earnings. This is a premium valuation in absolute terms, but not unreasonable for a market-leading, high-ROE, cash-generative AMC if earnings growth remains durable. It has a ‘Subscribe’ rating.

Rating - Subscribe - Long Term Investor Apply

SBI The valuation at 38x P/E looks attractive compared to peers. Strong Parentage & Distribution Networking, great Brand; Big Market, 14.7% of Total Industry Mutual Fund AUM; Positive Long-term Industry Outlook, and IPO Price Band Fairly Valued.

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