Can SBI Funds IPO deliver long-term growth for high risk investors?

SBI Funds Management, incorporated in 1992, is preparing for an IPO. It commands a 15.3% market share in mutual fund QAAUM at about Rs 12.5 lakh crore and total QAAUM of Rs 29.46 lakh crore. Revenue grew 28% annually to Rs 4,389 crore and net profit rose 22% annually to Rs 3,067 crore between FY24 and FY26, with ROE expanding to 43% and the lowest operating expense ratio of 0.08% among top AMCs. The IPO is priced at a P/E of 38.2, lower than peers HDFC AMC at 47.7, ICICI Prudential AMC at 41.1 and Nippon Life AMC at 50.9, though its lower equity-oriented AUM mix may weigh on long-term earnings.