₹13,000 Crore SBI MF IPO Planned, Asset Management Giant Targets ₹1.3 Lakh Crore Valuation

Mumbai: SBI Fund Management, the largest asset management company in India, is preparing to enter the stock market with a mega initial public offering (IPO) worth about Rs 13,000 crore. If launched, the issue could become one of the biggest IPOs in the country’s financial services sector.

According to people familiar with the matter, the company is planning to file its Draft Red Herring Prospectus (DRHP) by the end of March. If the filing happens on time, investors may soon get a chance to invest in one of India’s biggest mutual fund companies.

DRHP Filing Timeline Important

Sources said the company is trying to submit the DRHP before the end of the current financial year. If the filing is delayed and moves into the next financial year, the company may need to audit its financial records again. This could delay the IPO process by two to three months.

Earlier, the company had targeted the end of February to file the DRHP. However, the process was delayed due to a long and detailed audit exercise.

Expected Valuation and Market Position

SBI Fund Management is reportedly aiming for a valuation of around Rs 1.3 lakh crore for the IPO. However, in the unlisted market, the company’s shares are currently trading at an estimated valuation of about Rs 1.5 lakh crore.

Based on the proposed valuation, the company’s price-to-earnings (P/E) ratio could be around 51 times. This is slightly higher than that of its major competitor, ICICI Prudential AMC, which trades at around 50.4 times earnings.

Offer For Sale Structure

The proposed IPO is expected to be entirely an Offer For Sale (OFS). This means the company will not issue new shares. Instead, existing shareholders will sell part of their stake.

State Bank of India may sell around 6.3 percent of its stake, which could fetch more than Rs 8,000 crore. Meanwhile, France-based asset management company Amundi may also sell a portion of its holding and could receive less than Rs 5,000 crore.

Merchant Bankers and IPO Cost

To manage the IPO, the company has appointed nine merchant bankers, including Bank of America, Kotak, and HSBC.

Interestingly, SBI Fund Management plans to keep the IPO expenses low. The company is aiming to spend less than Rs 75 crore on the issue, which is nearly half the Rs 150 crore spent on the ICICI Prudential AMC IPO.

If successful, the IPO could become a major milestone for India’s mutual fund industry.