SBI Funds Management Cuts IPO Size to ₹9,812 Cr After Pre-IPO Stake Sale

SBI Funds Management (SBIFM), India's largest asset management company, has reduced the size of its initial public offering (IPO) to ₹9,812.9 crore, after its promoters sold a 1.6% stake to select investors ahead of the listing, the company said in an addendum to its Red Herring Prospectus (RHP) dated July 11.

The company is promoted by State Bank of India (SBI) and Amundi India Holding. The IPO had originally been planned at ₹11,692.9 crore, comprising 20.37 crore equity shares, or 10% of SBIFM's paid-up equity capital. The issue is entirely an offer-for-sale (OFS), meaning SBIFM itself will not receive any proceeds; all funds will go to the selling shareholders.

A day after SBIFM filed its RHP with the Registrar of Companies, the Securities and Exchange Board of India (SEBI) and the stock exchanges, SBI and Amundi signed share purchase agreements on July 9 to sell shares to 30 investors at the upper end of the price band. SBI sold 2.88 crore shares for ₹1,655 crore, while Amundi sold 39.19 lakh shares for ₹225 crore.

The transfer of these shares, amounting to a combined 3.27 crore shares or a 1.6% stake, was completed on July 10, according to SBIFM.

As a result, the IPO size was cut to 17.09 crore equity shares, worth ₹9,812.9 crore, representing 8.3933% of SBIFM's paid-up equity capital. Of this, SBI is now offering 9.95 crore shares (4.8851% stake) and Amundi is offering 7.14 crore shares (3.5082% stake), the company said.

Investors in the Pre-IPO Round

Susquehanna Asia Technology Pty Ltd and WhiteOak Capital India Opportunities Fund bought Amundi's 39.19 lakh shares between them. The remaining 28 investors purchased SBI's 2.88 crore shares, SBIFM said.

According to the company, PI Opportunities Fund, backed by Azim Premji, and investor Akash Manek Bhanshali were the largest participants, each acquiring 34.84 lakh shares worth ₹200 crore, representing a 0.17% stake. They were followed by 3P India Equity Fund, backed by Prashant Jain, which bought 26.13 lakh shares worth ₹150 crore.

WhiteOak Capital, Tata AIG General Insurance, Hara Global Capital Master Fund and Clarus Capital each purchased 17.42 lakh shares worth ₹99.9 crore, representing a 0.09% stake, SBIFM said. Other participants included Malabar India Fund, 360 ONE, Carnelian, Dymon Asia, Bennett Coleman and NEO Series.

Following the pre-IPO transaction, SBI's stake in SBIFM stands at 60.32%, while Amundi holds 36.06%, the company said.

IPO Timeline and Price Band

The price band for the IPO has been fixed at ₹545 to ₹574 per share, valuing SBIFM at ₹1,16,913.9 crore. The anchor book will open for a day on July 13, and the public issue will be open for subscription from July 14 to July 16. Share allotment is scheduled to be finalised by July 17, with listing on the stock exchanges expected on July 21.

SBIFM has reserved 2.7 lakh shares for its own employees, 29.87 lakh shares for SBI employees, and 1.3 crore shares for SBI shareholders. Employees of both SBIFM and SBI will get shares at a discount of ₹54 to the final offer price, according to the company.

Of the net offer, 50% has been reserved for qualified institutional buyers, 15% for non-institutional investors, and the remaining 35% for retail investors.

SBIFM serves as the investment manager for SBI Mutual Fund and also provides advisory services to offshore clients.

The book-running lead managers to the IPO are 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.