Is SBI Funds Management IPO 'sahi hai'? Brokerages decode investment case

SBI Funds Management IPO opens on July 14: Here's how brokerages view its valuation, growth prospects, profitability, and subscription potential

Brokerages remain broadly positive on the initial public offering (IPO) of SBI Funds Management, through which India’s largest asset management company (AMC) is set to enter the primary market with an aim to raise ₹9,812.91 crore.

 

The issue is entirely an offer for sale (OFS), with promoters State Bank of India (SBI) and Amundi India Holding planning to sell a combined 171 million equity shares. The public offering has been priced in the range of ₹545–₹574 per share, with a lot size of 26 shares, and will remain open for subscription from July 14, 2026, to July 16, 2026.

 

Analysts, meanwhile, have given favourable reviews of the issue, citing SBI Funds Management’s leadership position in the mutual fund industry, its strong SBI-backed distribution network, robust profitability, and high operating margins. They remain optimistic about the long-term growth prospects of India’s asset management industry, supported by the rising financialisation of household savings and increasing retail participation in mutual funds. 

 

Early grey market trends have also indicated favourable sentiment towards the public offering. Sources tracking grey market activity indicated that the company’s unlisted shares were trading at around ₹665 per share, reflecting a premium of ₹91 per share, or 15.85 per cent, over the upper end of the IPO price band.  Check - TOP GAINERS NSE | TOP LOSERS NSE

As investors await the opening of the SBI Funds Management IPO, here is what brokerages have said about the public offering:

 

Arihant Capital – Subscribe for long term

 

"SBI Funds Management enters FY26 as India's largest asset manager, with AUM of ₹12.51 trillion and a 15.3 per cent market share, operating on a capital-light, fee-based model. Revenue increased from ₹3,426.1 crore in FY24 to ₹4,976.1 crore in FY26, while Ebitda stood at ₹4,058.4 crore, translating into an approximately 82 per cent margin. PAT was reported at ₹3,067.4 crore, growing around 21 per cent year-on-year, reflecting strong operating leverage.

 

Structural growth drivers such as rising financialisation, deeper SIP penetration, and SBI-backed distribution support steady AUM growth and annuity-like fee income. However, earnings remain exposed to market volatility and TER/distribution regulations.

 

At the upper price band of ₹574, the issue is valued at a P/E of 38.1x on FY26 EPS of ₹15.06 and a P/B of 19.6x, broadly in line with or at a discount to larger listed peers, supported by its dominant franchise and superior return ratios.

 

We recommend a 'subscribe for long term' rating." 

Swastika Investmart – Subscribe

 

"India's largest AMC with ₹12.5 lakh crore QAAUM, a strong SIP franchise, and a robust SBI–Amundi distribution network.

 

The company is valued at 38.12x FY26 EPS, below the industry average of 41.64x, offering reasonable valuations. Strong RoNW of 43.02 per cent with an 81.56 per cent Ebitda margin reflects a highly profitable asset-light business model.

 

The IPO is a 100 per cent Offer for Sale (OFS) with no fresh capital infusion, and earnings remain linked to AUM growth and market performance.

 

Subscribe for long-term investors considering the company’s scale, margins, and relative valuation comfort."

 

Kantilal Chhaganlal Securities – Apply for listing gains

 

"The company has delivered strong financial performance, with revenue from operations increasing at a CAGR of 27.73 per cent from ₹2,690.56 crore in Fiscal 2024 to ₹4,389.49 crore in Fiscal 2026, driven by growth in asset management fees.

 

The company's return on equity stood at 43.02 per cent, 33.77 per cent, and 36.05 per cent as of March 31, 2026, 2025, and 2024, respectively.

 

Considering the AMC size, strong parentage, and positive industry outlook, the mutual fund industry in India is expected to grow at a CAGR of approximately 16–17 per cent, coupled with industry-wide SIP AUM growth of 23–26 per cent CAGR between FY26 and FY29.

 

SBI Funds Management is valued at 38.06x FY26 P/E, which is fairly valued compared with peers. We recommend investors apply for listing gains as well as for the long-term horizon."  ======================================================= 

(Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers' discretion is advised.)