After IPO Debut, SBI Funds Management Plans $200 Million Tech-Focused Alternative Fund

SBI Funds Management is planning to launch its first technology-focused fund for private companies as it looks to expand its presence in India's fast-growing alternative investment fund (AIF) industry, according to a Bloomberg report.

The proposed $200 million fund will be co-sponsored with Bengaluru-based venture capital firm 3one4 Capital Management LLP, people familiar with the matter told the news agency.

The two firms are awaiting approval from the Securities and Exchange Board of India (SEBI) before formally launching the fund.

Alternative Investments Become a Bigger Focus

The proposed fund marks SBI Funds' entry into technology-focused private market investments, an area that has attracted growing interest from asset managers and institutional investors.

SBI Funds Chief Executive Officer Debasish Mishra said at the company's listing ceremony on Tuesday that the asset manager is keen to expand its alternatives business because of its long-term growth potential.

India's alternative investment fund industry, which manages around $175 billion in assets, has expanded rapidly in recent years. Bloomberg reported that demand from ultra-high-net-worth investors seeking higher-yielding investment opportunities has been a key driver of this growth.

Several large asset managers, including ICICI Prudential Asset Management and Axis Asset Management, have already built sizeable alternative investment businesses alongside their mutual fund operations, the agency noted.

Plan Comes After Successful Market Debut

The announcement comes soon after SBI Funds Management made its stock market debut on Tuesday.

The company's shares listed at ₹613.30 on the National Stock Exchange (NSE), a 6.85% premium over the IPO price of ₹574 per share. On the BSE, the stock opened at ₹610, up 6.27% from the issue price. Following the listing, the company's market capitalisation stood at around ₹1.24 lakh crore.

SBI Funds Management raised ₹9,812.91 crore through an entirely Offer for Sale (OFS), with existing shareholders State Bank of India (SBI) and Amundi India Holding selling 17.1 crore shares. Since the issue did not include any fresh equity, the company will not receive any proceeds from the IPO.

The IPO, priced in the range of ₹545-574 per share, was subscribed 41.66 times during the bidding period from July 14 to July 16, driven by strong demand from institutional investors.