SBI board approves IPO of SBI Funds Management; PSU lender to sell 6.3% stake

India’s largest mutual fund house is ready to test public market waters. SBI Funds Management Ltd — a joint venture between the country’s biggest bank, State Bank of India, and France’s Amundi, one of Europe’s largest asset managers — will see its parent companies sell a combined 10% stake through an initial public offering (IPO).

The IPO framework agreement is expected to be signed on 10 November, with the entire process likely to be finalised sometime in 2026, according to a stock exchange filing by SBI on Thursday.

The move, cleared by SBI’s executive committee of the central board (ECCB), marks the third marquee listing from the SBI stable — after SBI Cards and SBI Life Insurance — and aligns with the government’s broader push for state-run banks to unlock value from their subsidiaries.

The IPO will see a 6.3% stake sale by SBI and 3.7% by its French partner.

SBI Funds Management is the country’s largest mutual fund asset manager. It manages an quarterly average AUM of ₹11.99 trillion in mutual funds and ₹16.32 trillion of AUM under alternates, as of September end, as per monthly disclosures from the AMC.

“The ECCB of State Bank of India has accorded approval to divest 3,20,60,000 equity shares, being equivalent to 6.3007% of total equity capital of SBI Funds Management Limited through Initial Public Offering, subject to all regulatory approvals,” SBI said in the stock exchange filing.

SBI shares closed 0.23% up at ₹959.85 on the National Stock Exchange (NSE) on Thursday, compared to the Nifty 50 index, which closed 0.34% up at 25,509.7

Recently, Canara Robecco AMC, a joint venture between state-run Canara Bank and Orix Corporation Europe N.V., got listed on the exchanges in October, following the government’s push to public-sector banks (PSBs) to list their subsidiaries to unlock value.

SBI chairman Challa Sreenivasulu Setty said in the exchange filing that considering SBI Funds Management’s sustained strong performance and market leadership over the years, it is considered an opportune time to launch the IPO process.

“Apart from maximizing value realization for the existing stakeholders, the IPO will create opportunities for the general shareholders, broaden market participation and lead to increased awareness of products to a wider set of potential investors,” said Setty. “This will further enhance the public visibility of the Company, thereby reinforcing its position as a leading player in the asset management industry.”

Valérie Baudson, chief executive officer of Amundi, in a statement, said, “This IPO will allow to unlock the value jointly created by SBI and Amundi, which will continue their long-term partnership in a fast-growing Indian market that presents significant development potential.”

Amundi India Holding plans to sell 1.88 million equity shares, representing 3.7% of SBI Funds Management’s total equity capital.

SBI Funds Management’s profit after tax increased 23% to ₹2,531 crore in FY25, as per its annual report. Its total income increased 26% to ₹4,320 crore in the same fiscal year.

Currently, the unlisted stock of SBI Funds Management is trading at ₹2,625, as per data from Unlisted Arena.

SBI Funds Management trades at over 50x trailing 12-month earnings in the unlisted market. Comparatively, its listed peers, HDFC AMC, is trading at 46x PE, Nippon India Asset Management is trading at 42x PE, Aditya Birla Sun Life AMC is trading at 23x, and UTI Asset Management Company is trading at a 20x PE, as per data from Bloomberg.

The mutual fund industry’s AUM has grown almost three times to reach ₹65.74 trillion as of March 2025, as per the Association of Mutual Funds of India (AMFI) annual report for FY25.

Incred Equities, in a report dated 13 October, said the mutual fund industry’s quarterly average AUM in Q2FY26 grew at a moderate pace of around 4%, led by healthy net inflows, as capital market gains slowed during the September quarter.

It added that despite rising geopolitical stress and volatile capital markets, the inflows remained healthy, although a shift in the investment trend was observed during the quarter, with more funds being allocated to relatively low risk assets like large-cap and flexi-cap schemes, and exchange traded funds (ETFs).