SBI Funds IPO priced at discount to listed AMCs on valuation metrics

SBI Funds Management IPO is priced at a discount to listed AMCs on valuation metrics, with a market capitalisation-to-equity ratio of 20 compared with 24 for ICICI Prudential AMC and 23 for Nippon Life AMC. The relatively lower valuation partly reflects its lower share of equity-oriented schemes, since equity funds generate higher fee income and profitability and investors typically assign premium valuations to equity-focused asset managers. As the largest AMC by AUM, its pricing sets a benchmark for the upcoming issue.