SBI Funds IPO: Can its private-markets bet close the profitability gap?

SBI Funds Management, India's largest asset manager with about Rs 29.5 trillion in assets, is launching a Rs 9,813 crore IPO entirely through an offer for sale at a price band of Rs 545-574, opening on 14 July. The company is valued at approximately 38 times FY26 earnings, an 8 percent discount to the industry's 41.6 times and 23 percent below ICICI Prudential AMC's 49.4 times, reflecting concerns that its scale has not translated into superior profitability, with profits at 0.25 percent of QAAUM versus 0.30 percent for ICICI Prudential AMC and 0.31 percent for HDFC AMC. The stock is commanding a 12-13 percent grey market premium, and management is betting on private markets and Category II AIFs to drive the next phase of earnings growth.