Both shareholders are selling part of their stakes in this mega IPO.
At first glance, the transaction may appear like one of the promoters is exiting the business. However, that is not the case.
According to the DRHP filed by the company, both SBI and Amundi will continue to remain long-term shareholders even after the IPO.
So, what exactly is changing? Let’s take a look at the key factor investors need to watch
An offer for sale, not a fund-raising exercise
One of the most important aspects of the SBI Funds Management IPO is that it is entirely an Offer for Sale (OFS).
This in simple words means that the company is not issuing any new shares and will not receive any money from the IPO. Instead, the proceeds from the issue will go directly to the existing shareholders who are selling part of their holdings.
According to the DRHP, the public issue consists of up to 203.7 million equity shares being offered by the two promoters.
Who is selling how much?
SBI is the larger shareholder and is selling the biggest portion in the IPO.
According to the DRHP, SBI will sell up to 128.33 million shares, accounting for nearly 63% of the total offer.
Amundi India Holding, the second promoter, will sell up to 75.37 million shares, representing the remaining 37% of the issue.
The final issue size in rupee terms will be determined only after the price band and final offer price are announced.
Are SBI and Amundi parting ways?
SBI’s current stake in SBI Mutual Fund is 61.76% meanwhile Amundi India Holding holds 36.26%.
In the DRHP, the company noted that the two shareholders have entered into an Inter-se Agreement, under which both have agreed to continue holding significant stakes even after meeting the minimum public shareholding requirements.
Under this agreement, SBI has committed to maintaining at least a 52% stake in the company on a fully diluted basis. Amundi has agreed not to reduce its holding below 23%.
In other words, both promoters will continue to remain controlling shareholders after the IPO.
Long-term partnership remains intact
The relationship between SBI and Amundi is also expected to continue beyond the public issue.
According to the DRHP, both companies signed a Commercial Agreement on March 19, 2026, under which they will continue working together as preferred partners for investment management and distribution services.
This indicates that while both shareholders are monetising a part of their investment, the operational partnership remains unchanged.
A significant gain for both promoters
The IPO will also allow both promoters to unlock value from an investment they made years ago.
According to the DRHP, SBI’s weighted average cost of acquiring the shares being sold is Rs 0.15 per share, while Amundi’s acquisition cost stands at Rs 4.35 per share.
The final gains will depend on the IPO price, which will be announced closer to the issue opening.
What should investors need to watch ahead of the IPO opens
SBI Funds Management is India’s largest asset management company by quarterly average mutual fund assets under management. It has a 15.4% market share as of December 31, 2025.
Furthermore, the shares of the company will be listed in both BSE and the National Stock Exchange (NSE).
As per IPO regulations, up to 50% of the issue has been reserved for Qualified Institutional Buyers, at least 15% for Non-Institutional Investors, and at least 35% for Retail Individual Investors.
Disclaimer: Investment in the securities market is subject to market risks; read all the related documents carefully before investing. This article provides general information regarding the upcoming initial public offering (IPO) of SBI Funds Management Limited based on its Draft Red Herring Prospectus (DRHP) filed with SEBI and does not constitute a buy, sell, or hold recommendation, or an offer or solicitation to subscribe to shares. Past performance or asset size of the asset management company does not guarantee future market returns or equity performance post-listing. Investors are advised to consult a SEBI-registered investment advisor or qualified financial consultant to understand personal risk profiles before making any allocation decisions. This disclaimer has been generated using AI to support user well-being and responsible content consumption.
