Synopsis

SBI Funds Management set its IPO price band at ₹545-574 per share. This pricing represents a significant discount to its unlisted market value. The public issue, an offer for sale, opens for subscription on July 14. Investors who bought shares earlier may face mark-to-market losses. This IPO is the largest so far in 2026.

Mumbai: SBI Funds Management, India's largest asset manager, has set the price band for its ₹11,693 crore initial public offering (IPO) at ₹545-574 per share. The issue pricing represents a discount of about 30% to the unlisted price of around ₹820 earlier this week, dealing a blow to the scores of investors who have bought these shares ahead of the IPO on expectations of strong listing gains.

At the IPO price of ₹574, the market capitalisation of SBI Funds Management is at ₹1.16 lakh crore. On July 3, the value in the unlisted market was ₹1.68 lakh crore. The issue will be open from July 14 to 16.

"SBI Funds Management had touched a high of ₹850-860 just weeks before the announcement of its price band, reflecting the frenzy or FOMO buying in the stock," said Sandip Ginodia, director at Altius Investech, a firm that deals in unlisted shares.

The public issue - the largest so far in 2026 - is entirely an offer for sale (OFS) of 20.37 crore shares, with no fresh capital being raised by the company. The IPO represents about 10% of the asset manager's paid-up equity capital, making it one of the largest IPOs this year.

SBI Funds Management, a joint venture between State Bank of India and France-based Amundi, is among the country's leading asset management companies. SBI currently holds around 61.9% stake in the company, while Amundi owns about 36.4%. As part of the OFS, SBI will divest up to 1,283 lakh shares, while Amundi will sell up to 754 lakh shares.

The value of SBI Funds shares dropped in the unlisted market on Thursday, tracking the IPO price announcement.

"The pricing was widely expected to be in the ₹625-630 range, which, along with potential listing gains, could have taken the stock price past ₹700," said Ginodia. "Investors who bought the stock at ₹820-840 are likely to face some panic now, as they will be locked in for six months and staring at mark-to-market losses, with the hope that the company's strong performance over the next six months helps bridge that gap."

This is not the first time that IPO prices have been significantly lower than the unlisted market value. In 2025, Tata Capital's IPO was priced at a 55% discount to the prices in the unlisted market. Earlier, HDB Financial Services' IPO was priced nearly 40% below its last traded level in the unlisted market.

"Equity investing has become a fad, and to find exclusivity, people are turning to the unlisted market, due to which prices sometimes go up to unreasonable valuations, and later we see them dropping during the IPO," said Apurva Sheth, head of research, Samco Securities.

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