SBI MF Selects a Syndicate of Seven Investment Banks for IPO

The State Bank of India Mutual Fund is set to launch a massive IPO to raise up to $ 1 billion. It has picked seven investment banks to manage the launch of the mega IPO. On December 15, India’s biggest lender, SBI, had announced to sell its stake in SBI Funds Management Private Limited through the IPO route. It expects to raise up to $ 1 billion by selling the stake in SBI mutual fund, valuing the company around $7 billion.

According to the sources, investment banks-SBI Capital, BofA Securities, Citi, HSBC Securities, Kotak Mahindra Capital, Axis Capital, and BNP Paribas have been shortlisted to manage the listing SBI MF shares. It is expected that the shares of the SBI mutual fund will go public in the first half of FY23. 

SBI Mutual Funds is a joint venture (JV) between India’s State Bank of India and France’s Amundi Asset management. SBI is looking to sell its 6 per cent stake (out of 63% stake), and Amundi asset management wishes to sell a 4 per cent stake (out of 37% stake) in SBI mutual funds. After recently divesting part of its stake in its life insurance and cards businesses, SBI seeks to sell the SBI MF stake to derive more value from its units. It had raised around Rs 10,354.77 crore via the initial stake sale of SBI Cards & Payment Services in March 2020 through IPO.

UTI Asset Management Company, HDFC Mutual Fund, Aditya Birla Sun Life AMC, and Nippon Life India Asset Management are already listed on the stock exchange. If SBI Mutual Fund gets listed, it will become the fifth domestic mutual fund house to debut on the stock exchange.

According to the SBI mutual fund financial reports for FY 2020-21, the business has grown by 35% in AUM on a year-on-year basis. And the SIP book has increased 5x times from FY 2016 to FY 2021.

For any clarifications/feedback on the topic, please contact the writer at namita.shah@cleartax.in

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