SBI Funds Management poised for strong India debut after $1 billion IPO

Shares of the nation's largest funds manager by assets were quoted about 18% above the IPO price of ₹574 in the gray market on Monday

By Rajesh Mascarenhas

 

SBI Funds Management Ltd. is poised for a strong trading debut Tuesday after investors piled into its $1 billion initial public offering, making it one of India’s most heavily subscribed billion-dollar share sales.

 

Shares of the nation’s largest funds manager by assets were quoted about 18 per cent above the IPO price of ₹574 in the gray market on Monday, according to IPOWatch and IPOCentral data. If the premium holds, SBI Funds would debut with a market capitalization of more than ₹1.38 trillion ($14.3 billion), making it India’s No. 2 listed asset manager behind ICICI Prudential Asset Management Co., which is valued at about ₹1.54 trillion ($16 billion). 

 

 

The ₹9,800 crores IPO was subscribed 42 times, underscoring strong backing from institutional and retail investors despite heightened scrutiny of valuations in India’s primary market. Many domestic brokerages recommended the offer for subscription, citing the company’s market leadership, profitability and attractive long-term growth prospects.

 

A strong debut would provide a boost to India’s IPO pipeline, signaling healthy investor appetite for large offerings. Companies including Manipal Health Enterprises Ltd., National Stock Exchange of India Ltd. and Jio Platforms Ltd. are among those preparing to tap the equity market in the coming months.

 

SBI Funds manages about ₹12.5 trillion in assets, accounting for roughly 15 per cent of India’s mutual fund industry, as of June, according to data by the Association of Mutual Funds in India. 

 

Geojit Investments Ltd. recommended subscribing to the IPO for the medium to long term, saying the shares are valued at 38 times earnings at the upper end of the price range at a modest discount to listed peers.

 

Axis Capital highlighted the company’s industry-leading cost efficiency, citing that SBI Funds had the lowest operating expense ratio among India’s top 10 asset managers at 0.08 per cent of the quarterly average assets under management in fiscal 2025 compared to 0.10 per cent to 0.19 per cent for its peers.