India's premier asset management firm, SBI Funds Management, is gearing up for a landmark initial public offering that could reshape the country's financial landscape. According to multiple sources familiar with the ongoing discussions, the company is expected to submit its draft prospectus to market regulators by the middle of February, with an ambitious target to list on stock exchanges by April 2026.
Massive Valuation and Stake Divestment
Investment banking firms have presented detailed proposals for an IPO ranging between $1.2 billion and $1.4 billion, which would value the asset management giant at an impressive $12 billion to $14 billion. This substantial valuation reflects the company's dominant position in India's rapidly growing mutual fund industry.
The joint venture between India's banking behemoth State Bank of India and French asset management powerhouse Amundi will see both partners divest significant stakes. SBI, which currently holds 61.9% of the company, plans to sell approximately 6.3% of its holding, while Amundi, with a 36.4% stake, will divest around 3.7%. The combined 10% stake sale will meet regulatory requirements for the public offering, with the remaining shares held by employees and other individual stakeholders.
Financial Performance and Market Context
SBI Funds Management has demonstrated remarkable financial strength, managing average assets worth a staggering ₹12.5 trillion as of December 31, 2025. The company's profitability has shown consistent growth, reporting a net profit of ₹2,531 crore in fiscal year 2025, representing a substantial increase from ₹2,062 crore in the previous financial year.
"The target is to file draft papers by February, ideally by the middle of the month or at least during the third week," revealed one insider familiar with the planning. "The subsequent goal is to open the IPO in April, though this timeline remains subject to various market conditions and regulatory approvals."
The Securities and Exchange Board of India typically requires two to three months to review and approve IPO applications, though this timeframe can vary significantly depending on the complexity of each case. "The prevailing market conditions will also need careful consideration before proceeding with the public offering," the source emphasized, highlighting the importance of timing in such significant financial transactions.
Banking Consortium and Valuation Challenges
SBI Funds Management has assembled an impressive consortium of investment banks to manage what promises to be one of India's most significant public offerings of 2026. The team includes SBI Capital Markets, Kotak Mahindra Capital, Axis Bank, ICICI Securities, JM Financial, Motilal Oswal, Bank of America, HSBC, and Jefferies Financial Group.
However, the road to valuation consensus has not been entirely smooth. "Different merchant bankers have presented varying valuation estimates," explained a second person involved in the discussions. "The final valuation will undergo rigorous examination closer to the filing date. The banking teams must collaborate with valuation agencies and conduct thorough internal assessments to determine the optimal pricing structure."
The valuation exercise has reportedly created some friction, with Bloomberg reporting in early January that several major Wall Street institutions, including Citigroup Inc. and JPMorgan Chase & Co., opted out of advisory roles, partly due to fee-related considerations. SBI Funds Management subsequently replaced Citigroup Capital Markets with Jefferies Financial Group to complete its banking consortium.
India's Booming IPO Market
The proposed SBI Mutual Fund IPO arrives during a period of exceptional activity in India's primary markets. According to data from Prime Database, 103 companies raised an impressive ₹1.76 trillion through IPOs in 2025, surpassing the previous year's figures of 91 companies raising ₹1.6 trillion.
This offering follows several successful financial services listings, including rival ICICI Prudential Asset Management's $1.2 billion IPO last month, which now commands a market valuation exceeding $14 billion. Additionally, Canara Robeco Asset Management Company Ltd went public in October 2025, part of a broader government initiative encouraging public-sector banks to list their subsidiaries and unlock shareholder value.
The strategic decision for SBI and Amundi to pursue a public listing was formally announced in November 2025, with both partners emphasizing that the final execution would depend on regulatory approvals and favorable market conditions. As India's mutual fund industry continues its rapid expansion and domestic investors show increasing appetite for quality financial offerings, the SBI Funds Management IPO represents a watershed moment for the country's capital markets and asset management sector.
