SBI Mutual Fund initiates process of appointing merchant bankers for IPO

SBI Mutual Fund, the biggest fund house, has initiated the process for the appointment of merchant bankers and other service providers to facilitate an initial public offering (IPO).

The boards of respective shareholders, like SBI and Amundi, and the board of SBI Funds Management Ltd (SBIFML) have approved a timeline of 12 months, SBI Chairman C S Setty told PTI in an interview.

"We are very seriously working on that, and in this timeline we should hit the market...we have started the process of identifying the merchant bankers and other service providers," Setty, who is also chairman of SBIFML, said.

SBIFML is a joint venture between State Bank of India and Paris-based Amundi, with 61.98 per cent and 36.40 per cent stake, respectively. The fund house managed assets of around Rs 12 lakh crore as of September 2025.

The company's two promoters plan to sell a combined 10 per cent stake through the public offering.

Last month, SBI approved the offloading of 3,20,60,000 equity shares, being equivalent to 6.3007 per cent of the total equity capital of SBIFML through IPO.

Amundi India Holding, the other promoter of SBIFML, will divest 1,88,30,000 equity shares, being equivalent to 3.7006 per cent of the total equity capital of SBIFML, with a total of 10.0013 per cent stake comprising 5,08,90,000 shares to be listed.

SBIFML is the largest asset management company in the country with a market share of 15.55 per cent, managing Quarterly Average Assets Under Management (QAAUM for Q2 FY2026) of Rs 11.99 lakh crore under various schemes of SBI Mutual Funds and AUM of Rs 16.32 lakh crore under alternate funds as on September 30, 2025.

SBI Mutual Fund was established in 1987 with SBI as the sponsor and was the first non-UTI mutual fund in India.

In 1992, SBI Funds Management Limited was incorporated as a wholly owned subsidiary of SBI as Investment Manager for SBI Mutual Funds to provide investment solutions across different asset classes.

The total income of SBI Mutual Fund was Rs 4,230.92 crore in FY25, 0.64 per cent of the total income of SBI Group.

Setty, the chairman of the country's biggest lender, had expressed confidence in achieving its 3 per cent net interest margin guidance despite the RBI's 0.25 per cent repo rate cut in the December policy.

Last week, the Reserve Bank of India (RBI) lowered the repurchase, or repo rate, by 25 basis points to 5.25 per cent and retained a neutral stance, which gave room for further rate cuts. The rate cut came after a gap of six months with a view to further bolster growth, which hit six quarter high of 8.2 per cent in Q2 of FY26.

The SBI chairman also said the bank may not need equity capital to drive credit growth and maintain a capital adequacy ratio of 15 per cent over 5-6 years.