SBI Mutual Fund Gears Up for $1.4 Billion IPO

SBI Funds Management has begun preparations for an IPO in 2026, which could raise approximately $1.4 billion. SBI, as well as its partner, Amundi, plan to reduce the amount they own in the company; this could create a large transaction that would rival other recent transactions in size.

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Banker Appointments and Timeline

SBI Funds Management hired nine investment banks: Kotak Mahindra Capital, Axis Capital, SBI Capital Markets, Motilal Oswal, ICICI Securities, JM Financial, along with Citigroup, HSBC, and Bank of America (India). These advisory appointments are expected to be confirmed soon, with an aim to complete the IPO by the first half of 2026 at a valuation of approximately $14 billion, however, the valuation is subject to change.

Stake Sale Details

The State Bank of India (SBI) approved the divestment of a 6.3% share on November 6, pending necessary approvals. Meanwhile, the Amundi India Mutual Fund (AMF) is looking to reduce its holdings by 3.7% or ~18.83 million equity shares. 
After the sale SBI holds 61.9% of the AMF's shares and Amundi 36.36% of the AMF's equity shares. As for the SBI's income for FY25 from this divesting, SBI will receive approximately ₹4230.92 Crores. 

Strategic Context

This is the third listing of SBI's Subsidiary after SBI Life Insurance and SBI Cards. This listing occurs after the successful listing of ICICI Prudential Asset Management Company (ICICI Prudential AMC) last month, which had raised ₹12,000 crores in an IPO. ICICI Prudential AMC is currently valued at approximately ₹1400 crores. Currently, there has been no official confirmation, but there continues to be active discussions.

AMC IPO Wave

Over 45 asset management companies (AMCs) currently exist in India managing more than ₹70,000 crores. Collectively, the top five AMCs control approximately 60% of this market share. SBI Mutual Fund operates on a retail and institutional model, allowing SBI MF potential for premium valuation (AUM Multiple of 3 to 4 times). 
By selling a portion of its stake now, SBI is able to recognise the embedded value of its AMF. The AMF is witnessing a 25% CAGR in terms of its Assets under Management (AUM) and a significant portion of this is attributable to the continued growth in Systematic Investment Plans (SIPs). 
SBI MF anticipates upwards of ₹2.5 billion in major-regulated board listing IPOs by 2026, according to available filings, essentially doubling the record of ₹1,75,901 crores set in 2025. An increase in NPS inflows and HNIs will provide a significant boost to the mutual fund marketplace. 
Conversely, the lack of interest rates will metamorphose into fee reductions and the SEBI will restrict the amount of fees permitted. The potential IPO listing of SBI MF would unlock stocks, and would put in place a measure of the corporate governance structure of SBI MF similar to that of HDFC AMC.