Citi, JPMorgan Exit $1.4 Bn SBI Funds IPO over Low Fees

Global investment banks Citigroup and JPMorgan Chase & Co have decided not to advise on the planned $1.4 billion IPO of SBI Funds Management primarily due to low advisory fees, Bloomberg reported.

Point to note: State Bank of India (SBI) and France's Amundi, the joint venture partners in SBI Funds Management, had earlier said that they plan to sell a combined 10% stake through the IPO. The offering may reportedly raise around $1.4 billion, valuing the asset management company at roughly $14 billion.

Citigroup, which was initially appointed as one of the advisers for the IPO, later withdrew from the mandate after fee discussions, according to the report. SBI Funds Management subsequently replaced Citi with Jefferies Financial Group. Meanwhile, JPMorgan Chase also chose not to proceed with the transaction for similar reasons, Bloomberg added.

The decision by the two global banks comes after shareholders selling shares in the IPO reportedly offered advisory fees of around 0.01% of the issue size, a level that bankers reportedly described as extremely low. The report noted that some domestic advisers had quoted only token fees for the mandate, pushing overall fees to what bankers termed “rock bottom” levels.

This is in sharp contrast to broader market trends. According to London Stock Exchange data cited by Bloomberg, companies paid an average advisory fee of 1.86% of the issue size in 2025, up from 1.67% in 2024, highlighting how unusually low the proposed fees for the SBI Funds IPO are.

Despite the pullback by Citi and JPMorgan, several investment banks remain associated with the IPO. Kotak Mahindra Capital, Axis Bank, SBI Capital Markets, Motilal Oswal Investment Advisors, ICICI Securities and JM Financial have been selected to work on the offering, along with local units of Citigroup, HSBC Holdings and Bank of America, an earlier Bloomberg report had said.

Such low advisory fees are not unusual in government-linked transactions in the country. In a recent example, when State Bank of India raised ₹25,000 crore through a share sale in July, it paid six bankers a symbolic fee of just one rupee each, according to earlier reports.

In these deals, banks often accept minimal fees to gain prestige, improve their league-table rankings and strengthen long-term relationships with government-backed institutions.