India’s largest asset manager company SBI Mutual Fund has filed its Draft Red Herring Prospectus to raise about ₹13,000 crore.
The fund house, a joint venture between State Bank of India and France-based Amundi. While SBI will offload 128,334,397 equity shares, Amundi India Holding will sell 75,374,842 equity shares in the IPO.
Currently, SBI owns 61.98 per cent in SBI AMC while Amundi has a shareholding of 36.40 per cent stake.
SBI MF manages assets worth ₹16.32 lakh crore and holds a market share of 15.55 per cent in the mutual fund industry.
The fund house will become the seventh AMC to list on the stock exchange after Nippon Life India Asset Management, HDFC AMC, ICICI Prudential AMC, Aditya Birla Sun Life AMC, Canara Robeco AMC and UTI Asset Management Company.
The second largest asset manager ICICI Prudential AMC commends a market capitalisation of ₹1.39 lakh crore. The fund house got listed last year.
Lead managers
In all 9 investment banks including Kotak Mahindra Capital, Axis Capital, Jefferies, SBI Capital, ICICI Securities, Motilal Oswal, HSBC Securities, JM Financial and BofA Securities will be managing the issue. Kfin Technologies will be the registrar to the offer.
SBI Fund Management aims for a valuation of around ₹1.3 lakh crore for the IPO, which would translate to a price-to-earnings ratio of approximately 51 time, said an analyst.
In the unlisted market, the company’s shares currently trade at an estimated valuation of about ₹1.5 lakh crore.
Rajesh Singla, CEO & Fund Manager, Alpha AMC said while the filing momentum suggests readiness, execution within the current financial year remains uncertain.
In the current environment where volatility has returned and global cues remain uncertain companies are becoming more tactical about when they enter the market.
While short-term negative sentiments may impact listing gains, SBI MF operates in a structurally strong segment of asset management which continues to benefit from India’s long-term financialization trend, growing SIP flows, and retail participation, he said.
The IPO is expected to come at a premium valuation, but the aggressive pricing could face resistance in current bearish market as the issue is largely an offer-for-sale investors will closely evaluate valuation comfort rather than growth funding, he added.