Synopsis

SBI Funds Management has filed its red herring prospectus for an IPO comprising only an offer for sale by SBI and Amundi India Holding. The listing will offer investors exposure to India’s fast-growing mutual fund industry without raising fresh capital.

SBI Funds Management, a subsidiary of State Bank of India, has filed its red herring prospectus with the Registrar of Companies for its proposed initial public offering. The IPO will open for public subscription on July 14 and close on July 16. Anchor investors will be able to place bids on July 13, one working day before the issue opens. The bidding period for qualified institutional buyers will close on July 15, a day before the public issue closes.

The IPO will be entirely an offer for sale of up to 20,37,09,239 equity shares of face value Rs 1 each and seeks to value the company at Rs 1.17 lakh crores. This represents up to 10.0013% of SBI Funds Management’s paid-up equity share capital.

SBI will sell up to 12,83,34,397 shares through the offer, representing 6.3% of SBI Funds Management’s paid-up equity share capital. Amundi India Holding will sell up to 7,53,74,842 shares, representing 3.7% of the company’s paid-up equity share capital.

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Since the issue is fully an offer for sale, SBI Funds Management will not receive any proceeds from the IPO. The money will go to the selling shareholders, SBI and Amundi India Holding.

SBI had earlier informed the exchanges on March 19 that SBI Funds Management had filed its draft red herring prospectus. The latest filing of the red herring prospectus moves the IPO closer to launch, though the offer remains subject to regulatory approvals, market conditions and other considerations.

SBI Funds Management IPO details

SBI Funds Management is the investment manager of SBI Mutual Fund, one of India’s largest asset management businesses. The IPO is expected to be closely watched because of the scale of the mutual fund industry and SBI’s strong distribution reach across the country.

The listing would also give investors a chance to own a business linked to India’s growing financial savings market. Mutual funds have seen strong inflows from retail investors in recent years, helped by rising systematic investment plans and wider participation from smaller cities.

For SBI, the IPO will help partly monetise its stake in the asset management subsidiary. For Amundi India Holding, the offer will also provide a partial exit route.

The key details investors will watch next are the price band, issue size in rupee terms, market capitalisation and valuation compared with other listed asset management companies. The final pricing will determine how the offer stacks up against peers in the asset management space.

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