SBI Funds Management IPO 2026: Decoding The AMC's Growth Strategy Ahead of the Public Issue

SBI Funds Management raised Rs 1880 crore in a pre-IPO funding round, which saw participation from WhiteOak Capital, 3P India, Bennett Coleman and other major investors. State Bank of India (SBI) and Amundi India Holding sold 32.7 million shares in the funding round. Notably, the anchor investment round will be held today, July 13.

Following the development, in a conversation with Outlook Money, D.P. Singh, Joint CEO, SBI Funds Management and Debasish Mishra, MD & CEO, told Outlook Money about the company’s roadmap for growth.

The company mentioned in its red herring prospectus (RHP) that it depends on five distributors for over 25 per cent of its total mutual fund assets under management (AUM). Singh spoke about the dependence and clarified that the company has a strong network of independent financial advisors (IFAs) in addition to the five distributors.

"Today we are getting maximum money coming from the IFA channel, followed by the national distributor and the banking channel," Singh said.

Singh added that the executive team remains focused on aggressive expansion across available operational avenues rather than altering their existing business model. Outlining the strategy for capturing incoming capital flows, Singh emphasised a proactive approach to growth.

"We don't need to de-risk the dependence; we have to make it more diversified by getting more money from other channels," Singh said.

Mishra also spoke about the company’s plans to expand its passive funds AUM. Notably, SBI Funds Management is India’s largest passive fund manager with an AUM of Rs 3,99,953 crore and a 29.6 per cent market share (comprising ETFs and Index Funds). Mishra acknowledged that the asset management industry is witnessing a transformation in both passive and active investment vehicles. However, he expressed optimism about passive funds and added that he expects the segment to grow faster in the future. The company plans to maintain a dual focus approach. Confirming their commitment to serving entirely different client needs,

“Passive segment growth will be more in future because we have seen internationally that passive is growing faster than active. We are yet to mature in the market. We will still continue active and passive product innovations. But more or less we'll have to focus on both,” Mishra said.

Mishra also spoke about how SIPs will remain a core growth pillar for the company even amid market volatility. Typically, investors tend to become apprehensive of SIPs during periods of heightened volatility. However, Mishra said that investors are increasingly beginning to understand the benefit of regular monthly investing through systematic plans during volatile phases.

“When the market is low, you get more units, and when the market is high, your unit gets more value. The NAV goes up. If you look at the market volatility, SIP is the best instrument to balance the market's volatility. And this is what the investors are also understanding now. See, for example, many of the customers come to me even at the worst conditions their IRR is around 10 to 12 per cent. And when it was in the best condition, 18 per cent. So, this is where the balancing of volatility is done through SIPs,” Mishra said.

The AMC mentioned in its draft papers that it pays a royalty of 0.2 per cent of the total income or 20 per cent of profit-after-tax to the State Bank of India to use the SBI brand name. Notably, this fee has increased with the growth in the company’s profit in the last three years. Addressing financial fears that this corporate fee structure might limit operating leverage, Mishra detailed the mathematical safeguards in place.

“It'll never do that. And this royalty has been decided based on a proper design and the proper analysis by the SBI board. SBI has 17 non-banking subsidiaries. Out of that six, seven are AUM-based and profit-based. There are certain ones that are not making a profit; they are doing only advisory business. So, every subsidiary has a royalty system, and it is all streamlined; it is documented and designed properly. So, it'll never cannibalise the whole system,” Mishra said.

Amid the rising demand for avenues to invest beyond India, Mishra spoke about how SBI Funds Management plans to leverage this demand and provide investors with the means to invest outside India. Mishra revealed that the company primarily plans to do so by going via the GIFT City route and bypassing the $8 billion industry-wide cap for fund-houses offering overseas investment schemes.

“...the Gift City route is better. And in fact, we have started a subsidiary, SBI Fund International Limited, in Gift City only. And through this subsidiary, we'll start to enter the global market. We also have our own subsidiary in the company that is Amundi, which is Europe's largest mutual fund and asset manager company, with a base of around 2.5 trillion euros, and they have a presence across more than 50-60 countries. So, through them also we will expand internationally,” Mishra said.

SBI Funds Management’s public issue is the largest public issue so far in 2026. The company plans to raise Rs 9,812.91 crore through an offer for sale of 171 million shares. The public issue is set to open on July 14. State Bank of India and Amundi will pare their stake in the offer-for-sale, and after the issue, their stake will reduce to 54.46 per cent and 32.56 per cent, respectively.