SBI Funds Management, the asset management arm of SBI Mutual Fund, is planning to file its draft red herring prospectus (DRHP) with the market regulator by the end of this week, industry sources told Fortune India. This will be the third subsidiary of State Bank of India (SBI) to be listed after SBI Cards and SBI Life Insurance.

The company, a joint venture between SBI (63%) and Europe’s Amundi (37%), is looking to raise around ₹13,000 crore through an initial public offering (IPO), which could value the firm between ₹1.3 lakh crore and ₹1.5 lakh crore, according to sources.

The proposed public issue of one of India’s leading asset managers will be entirely an offer for sale (OFS), with promoters expected to divest a combined 10% stake. SBI is likely to offload 6.3%, potentially raising over ₹8,000 crore, while Amundi may sell 3.7% for about ₹5,000 crore.

The public issue would place it among India’s largest financial services IPOs, with only Life Insurance Corporation of India (₹20,557 crore), One97 Communications (₹18,300 crore), and Tata Capital (₹15,511 crore) raising larger amounts.

Nine merchant bankers, including Bank of America, HSBC, and Kotak, have reportedly been appointed to manage the offering.

In November last year, SBI and Amundi jointly initiated plans for the IPO of SBI Funds Management, stating that the listing would create opportunities for general shareholders, broaden market participation, and increase awareness of its products among a wider set of potential investors.

The listing is expected to take place in 2026, subject to regulatory approvals and market conditions.

Strong market position

Incorporated in 1992, SBI Funds Management has emerged as a dominant player in India’s asset management industry, with a market share exceeding 15%. It manages assets worth over ₹28 lakh crore, placing it among the largest asset managers globally.

The fund house operates a highly scalable, fee-based model, with revenue primarily linked to assets under management (AUM). Management fees - charged as a percentage of AUM  - form the core income stream, enabling strong operating leverage as assets grow.

A key strength lies in its dual distribution network: the vast physical reach of over 22,000 branches of State Bank of India, complemented by an expanding ecosystem of digital platforms and independent financial advisors. This hybrid model has helped the firm deepen retail penetration while scaling efficiently.

The company has also been investing in technology and AI-driven tools to reduce customer acquisition costs and enhance investor engagement - factors that are increasingly critical in India’s competitive mutual fund landscape.

The firm offers a wide range of investment products across equity, debt, hybrid, and exchange-traded funds (ETFs), including flagship schemes such as the SBI Bluechip Fund and SBI Small Cap Fund. Its offerings extend to portfolio management services, alternative investment funds (AIFs), offshore funds, and specialised vehicles through GIFT City.

Catering to a broad investor base - from retail investors to high-net-worth individuals (HNIs), non-resident Indians (NRIs), corporates, and institutional clients - the company has built a diversified and resilient franchise over more than three decades.

SBI Funds Management was the first asset management company in India to adopt the CFA Institute Asset Manager Code of Conduct, underscoring its focus on governance and ethical standards. It is also a signatory to the United Nations Principles for Responsible Investment, reflecting its commitment to sustainable investing.

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