SBI Funds shares list below GMP expectations, but Street sees up to 23% upside

SBI Funds Management shares made a decent D-Street debut on Tuesday, listing 6.85% higher than the IPO price at Rs 613.30 apiece on the NSE, with analysts advising allotted investors to hold the stock despite the listing falling short of grey market expectations.

The AMC’s shares listed at Rs 610 on the BSE, a 6.27% premium to the IPO price of Rs 574, giving the company a market capitalisation of Rs 1.24 lakh crore at debut.

SBI Funds Management IPO GMP

Despite the decent debut, SBI Funds Management’s listing fell short of grey market expectations. Ahead of listing, the unlisted shares of SBI Funds Management were trading with a grey market premium (GMP) of 16-18%, according to data on sites tracking the grey market.

Read More: SBI Funds Management Share Price Live

The much-awaited listing of SBI Funds Management comes after its IPO drew robust investor demand between July 14 and July 16, with the issue being subscribed nearly 42 times. Qualified Institutional Buyers (QIBs) led the response, subscribing their quota more than 140 times, while the portions reserved for Non-Institutional Investors (NIIs) and Retail Individual Investors (RIIs) were subscribed 22.5 times and nearly 4 times, respectively.

The IPO, launched to raise Rs 9,795 crore at a price band of Rs 545-574 per share, entirely comprised an offer for sale (OFS) of 17.10 crore shares by existing shareholders State Bank of India (SBI) and Amundi. Since there was no fresh issue, SBI Funds Management will not receive any proceeds from the IPO, with the entire amount going to the selling shareholders.

Here’s what brokerages and analysts are advising investors to do after the much-awaited listing of SBI Funds Management on Dalal Street.

Emkay on SBI Funds Management shares

Before the listing, Emkay Global Financial Services had initiated coverage on SBI Funds Management shares with a ‘Buy’ call and a target price of Rs 750 apiece, implying 31% upside from the IPO price of Rs 574 apiece. The brokerage said that its positive view rests on three pillars.

The first among them is SBI’s brand and distribution, coupled with significant under-penetration of SBI MF within the SBI Bank channel. Secondly, the sustained shift in asset mix toward higher-yielding assets such as equity and alternate investments (AIF/PMS) is likely to support revenue yields. Lastly, the economies-of-scale-led operating leverage is expected to drive a 17% EBITDA CAGR over FY26-29, according to the brokerage.

“As the savings and investment needs of Indians evolve, the middle class is increasingly embracing mutual funds as its core investment vehicle, and SBI AMC has all the ingredients to become ‘the asset manager to every Indian,’ just as its parent has become ‘the banker to every Indian’,” Emkay said.

Also read | SBI Funds Management gets 2 buy calls before listing. Why Equirus, Emkay see up to 31% upside

Equirus Securities on SBI Funds Management shares

Equirus Securities initiated coverage on SBI Funds Management shares with a ‘Long’ rating and a March 2027 target price of Rs 675. The target implies an upside of about 18% from the issue price of Rs 574. The brokerage noted that the company is one of the strongest franchises in India’s asset management industry, backed by scale, SBI’s distribution network, sticky SIP flows and strong profitability.

It believes that SBI Funds Management is well placed to benefit from India’s financialisation trend, as more household savings move into mutual funds, SIPs and market-linked products.

What other analysts are suggesting?

Analysts said investors who were allotted shares in SBI Funds Management IPO can either book listing gains or stay invested, depending on their holding period. “We expect the stock to list at 15% premium, and investors with a short-term horizon may consider booking profits if they plan to participate in upcoming IPOs. Given the company’s strong fundamentals, long-term investors can consider holding the stock for 1-2 years for healthy returns,” said Geetanjali Kedia, IPO expert at SPTulsian Investment Advisers.

Vaqarjaved Khan, senior fundamental analyst at Angel One, meanwhile had suggested that allotted shareholders can consider holding the stock due to its strong fundamentals, healthy margins, ROEs, and leadership in the AMC segment. “However, fresh investors should avoid chasing the stock at elevated post-listing levels,” he said.

Narendra Solanki, head of fundamental research at Anand Rathi Share and Stock Brokers, also had said that investors who were allotted shares in the IPO should consider holding the stock for the long term, given its strong growth prospects.

Also read | SBI Funds pays razor-thin banker fees on top India IPO of 2026

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)