Pre-IPO Frenzy: Marquee Investors Buy Bulk Stakes as SBI Funds Management Reduces IPO Size to Rs 9,812.9 Crore

Pre-IPO Frenzy: Marquee Investors Buy Bulk Stakes as SBI Funds Management Reduces IPO Size to Rs 9,812.9 Crore​

India's largest asset management company, State Bank of India (SBI) Funds Management (SBIFM), has adjusted its Initial Public Offering (IPO) size following a successful pre-IPO round. The offering amount was reduced from the initial plan of Rs 11,692.9 crore to Rs 9,812.9 crore after selling a portion of its stake to several high-profile investors.

The IPO is structured entirely as an offer for sale (OFS), meaning the company will not receive any funds from public subscribers; all proceeds will go directly to the selling shareholders. This reduction was driven by the successful transfer of 3.27 crore shares, representing a 1.6 percent stake, to marquee investors during the pre-IPO phase.

IPO Structure and Market Valuation​

SBIFM had initially planned an IPO comprising 20.37 crore equity shares, valued at Rs 11,692.9 crore. The updated offering size now stands at 17.09 crore equity shares for Rs 9,812.9 crore. The price band for the issue has been fixed at Rs 545 to Rs 574 per share, valuing SBIFM at Rs 1,16,913.9 crore.

The IPO is set to open for public subscription on July 14 and close on July 16. The company's shares are expected to be listed on the stock exchanges on July 21.

Power Players Acquire Stakes in Pre-IPO Round​

State Bank of India (SBI) and Amundi India Holding, both promoters of SBIFM, engaged in share purchase agreements on July 9 to sell a combined total of 3.27 crore shares. This pre-IPO round saw interest from major financial entities across the globe.

Notable participants included Azim Premji-backed PI Opportunities Fund and Akash Manek Bhanshali, with each acquiring 34.84 lakh shares valued at Rs 200 crore, representing a 0.17 percent stake in SBIFM. Prashant Jain-backed 3P India Equity Fund also participated significantly, purchasing 26.13 lakh shares worth Rs 150 crore.

Promoter Stake and Share Allocation Details​

The IPO allotment structure was finalized with provisions for existing shareholders, employees, and the public market. SBI Funds Management has reserved specific allocations for internal benefit.

A portion of the shares are earmarked for employee incentives: 2.7 lakh shares for SBIFM staff and 29.87 lakh shares for State Bank of India employees. Additionally, a pool of 1.3 crore shares is reserved for SBI shareholders. Employees of both organizations will receive these shares at a discount of Rs 54 per share against the final offer price.

Offer Details and Investor Segmentation​

The IPO's distribution plan reserves specific percentages of the net offer across different investor categories. A significant 50 percent of the net offering is designated for Qualified Institutional Buyers (QIBs). Non-institutional investors (NIIs) will receive 15 percent, leaving the remaining 35 percent allocated for retail investors.

SBI Funds Management confirmed that State Bank of India now holds a robust 60.32 percent stake in SBIFM, while Amundi retains a 36.06 percent stake following the pre-IPO transaction.

Road to Listing and Book Running Managers​

The IPO process is managed by several key entities from different financial institutions. Kotak Mahindra Capital Company, Axis Capital, BofA Securities India, HSBC Securities and Capital Markets (India), ICICI Securities, Jefferies India, JM Financial, Motilal Oswal Investment Advisors, and SBI Capital Markets are among the book-running lead managers for SBIFM's IPO.

The anchor book opening is scheduled for a single day on July 13. The final share allotment is expected to be completed by July 17.