Should you subscribe to the SBI Funds IPO? Here’s what brokerages say

SBI Funds ‌is a joint venture between the country’s largest lender, State Bank of India and Europe’s largest asset manager, Amundi. SBI and Amundi are offloading a total of 20.37 crore shares in the offering. The IPO is open until July 16. Up to 50% of the issue is reserved to Qualified Institutional Buyers (QIBs), 35 per cent to Retail Investors and 15 per cent to Non-Institutional Investors/HNIs. The IPO also features a specific reserved quota to eligible State Bank of India shareholders. It has also reserved shares worth ₹170 crore to eligible employees, who will receive a discount of ₹54 a share while bidding to the IPO. The lot size is 26 shares.

At the upper price band of ₹574, the IPO is valued at a post-issue P/E of 38.12x FY26 EPS, which appears fully priced relative to peers. However, supported by its market leadership, strong sponsor backing, expanding retail penetration, continued investments in digital capabilities, growing passive and alternative product offerings, and growing international presence, we believe the company is well positioned to capitalise on the structural development of India’s asset regulation sector. Accordingly, we recommend a ‘Subscribe’ rating to medium to prolonged investors.

Key Risks ● The company’s revenue and profitability are immediately linked to assets under regulation (AUM), making earnings vulnerable to equity market evaporative environment, adverse capital market conditions, regulatory risks, investor outflows and changes in fund mix, which could impact fee income and overall financial performance.

Anand Rathi highlights that the company operates an asset-light, fee-based business model through the regulation of mutual funds, Portfolio regulation Services (PMS), Alternative Investment Funds (AIFs), Specialised Investment Funds (SIFs) and advisory mandates across equity, debt, hybrid, passive and overseas investment items.

On the valuation front, at the upper price band, the company is valued at a P/E of 38.1 times. It recommends a “Subscribe” rating to the IPO.

Arihant Capital highlights that the company is India’s largest asset regulation company (AMC) by quarterly average mutual fund assets under regulation (QAAUM).

On the valuation front, at the upper price band, the issue is valued at a P/E of 38.1 times, broadly in line with or at a discount to larger listed peers, supported by its dominant franchise and superior return ratios. It recommends a “subscribe to long term” rating.

Chola Securities highlights that the company benefits from the strong SBI franchise, which provides a significant competitive advantage through access to SBI’s extensive branch network, substantial customer base, and strong brand credibility, supporting customer acquisition and asset mobilisation, particularly in Beyond Top 30 (B-30) cities.

On the valuation front, it is fairly valued at 38 times FY26 earnings, compared with listed peers such as HDFC AMC (41 times), ICICI Prudential AMC (48 times), and Nippon Life India AMC (51 times), considering its AUM development prospects and revenue yield profile relative to peers. It has a “SUBSCRIBE” rating.

SMIFS Limited highlights that the company combines SBI’s unmatched domestic reach with Amundi’s global asset-regulation expertise.

On the valuation front, using FY26 profit after tax (PAT) of ₹30,673.76 million, the implied P/E is approximately 38 to 39 times FY26 earnings. This is a premium valuation in absolute terms, however not unreasonable to a market-leading, high-ROE, cash-generative AMC if earnings development remains durable. It has a ‘Subscribe’ rating.

Rating - Subscribe - Long Term Investor Apply

SBI The valuation at 38x P/E looks attractive compared to peers. Strong Parentage & Distribution Networking, great Brand; Big Market, 14.7% of Total sector Mutual Fund AUM; Positive prolonged sector Outlook, and IPO Price Band Fairly Valued.

SBI Mutual Fund is attractively valued relative to listed peers. The company commands the highest MF QAAUM of Rs. 12.5 lakh crore with a 15.3% market share, supported by a diversified product portfolio and a strong retail and institutional franchise. While Active MF QAAUM grew at a CAGR of 22% (FY24–FY26), the company continues to outperform on profitability and operating efficiency with a cost-to-income ratio of 20% and a strong EBITDA margin of 79%. SBI MF also reported a healthy ROE of 51%, significantly higher than HDFC AMC (33%) and Nippon Life AMC (35%). At 33.6x EV/EBITDA and 38.1x P/E, the issue is available at a discount to IPRU AMC & HDFC AMC. Given its market leadership, strong distribution network, healthy profitability and favourable sector outlook, we assign a ‘SUBSCRIBE’ rating to the issue from a medium- to prolonged perspective.

India’s largest AMC with ₹12.5 lakh crore QAAUM, a strong SIP franchise, and a robust SBI–Amundi distribution network. Valued at 38.12x FY26 EPS, below the sector average of 41.64x, offering reasonable valuations. Strong RoNW of 43.02% with 81.56% EBITDA margin, reflecting a highly profitable asset-light business. A 100% Offer to Sale (OFS) with no fresh capital infusion; earnings remain linked to AUM development and market performance. Subscribe to prolonged investors on scale, margins, and relative valuation comfort.

Prasenjit Paul, Fund Manager at 129 Wealth and Research Analyst at Paul Asset, said SBI Funds regulation is well positioned to benefit from the prolonged financialisation of domestic savings and rising SIP penetration, backed by its market leadership, strong brand and consistent profitability.

He noted that the IPO is priced at a slight discount to listed peers such as HDFC AMC, Nippon Life India AMC and ICICI Prudential AMC, however cautioned that the substantial issue size and entirely OFS environment of the offering could limit listing gains. Paul said the IPO is better suited to investors with a two- to three-year investment horizon rather than those seeking quick listing profits, while highlighting reduce fee yields from a higher share of passive and institutional assets, along with the growing adoption of low-cost index funds and tighter SEBI fee regulations, as key risks to margins.

Published on July 14, 2026