Shares of State Bank of India (SBI), the country’s largest lender, surged over 3% on Friday in line with the broader market after SBI Funds Management, the asset management arm of SBI Mutual Fund, filed its draft red herring prospectus (DRHP) with Sebi. This would be the third subsidiary of SBI to be listed after SBI Cards and SBI Life Insurance.

The initial public offering (IPO) of SBI Funds Management, a joint venture between SBI and Europe’s Amundi, is entirely an offer for sale (OFS) of up to 20.37 crore equity shares, with no fresh issue component, according to the DRHP.

The offering will see promoters, SBI (63%) and Amundi (37%), partially pare their stakes in the company via the OFS route.

Reacting to the development, SBI shares rose as much as 3.4% to ₹1,085 on the BSE. At the time of writing, the stock was trading 1.7% higher at ₹1,066.45, with a market capitalisation of ₹9.84 lakh crore.

The country’s most valued public sector bank had touched its 52-week high of ₹1,234.80 on February 24, 2026, and a 52-week low of ₹730.95 on April 7, 2025. The stock has delivered a positive return of 8% so far in calendar year 2026, despite correcting over 12% in the past month amid a broad-based market sell-off triggered by the Middle East crisis and a sharp spike in crude prices.

In an exchange filing on Thursday, SBI said it will divest up to 12.83 crore shares, representing a 6.3% stake, while joint venture partner Amundi India Holding will offload up to 7.54 crore shares, or a 3.7% stake.

The share sale remains subject to regulatory approvals, market conditions, and other considerations.

Notably, the number of shares offered by SBI has been significantly revised upwards, from 3.2 crore shares earlier to 12.83 crore shares, following an increase in SBI Funds Management’s equity base due to bonus share issuance and ESOP exercises.

As per report, SBI Funds Management is looking to raise around ₹13,000 crore through an IPO, which could value the firm between ₹1.3 lakh crore and ₹1.5 lakh 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.

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.

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