SBI to Offload 6.3% Stake in SBI Funds Management Through IPO

State Bank of India Approves 6.3% Stake Sale in SBI Funds Management via IPO

In a significant move towards unlocking value from its subsidiaries, State Bank of India (SBI) announced on November 6, 2025, that it will divest a 6.3% stake in its mutual fund arm, SBI Funds Management Limited (SBIFML), through an initial public offering (IPO). The decision was approved by the Executive Committee of the Central Board (ECCB) during its meeting held earlier the same day.

The development marks a major step in SBI’s broader strategy to streamline its holdings and enhance shareholder value by leveraging the robust growth of its asset management business.

SBI Board Approves Sale of 32.06 Million Shares

In an official exchange filing, the country’s largest lender confirmed that the ECCB has approved the divestment of 32.06 million equity shares, equivalent to 6.3007% of the total equity capital of SBI Funds Management Limited, via an IPO route.

The bank emphasized that the divestment will be subject to all necessary regulatory approvals, including clearances from the Securities and Exchange Board of India (SEBI) and other statutory bodies.

“The Executive Committee of the Central Board (ECCB) of State Bank of India, in the meeting held on 6th November, 2025, has accorded approval to divest 3,20,60,000 equity shares, being equivalent to 6.3007% of total equity capital of SBI Funds Management Limited, through Initial Public Offering, subject to all regulatory approvals,” SBI stated in its filing.

Also Read : Chip Giants Qualcomm and MediaTek Eye Local Sourcing in India

IPO Framework Agreement Expected by November 10

According to the lender, the IPO Framework Agreement between SBI and its partners is expected to be finalized by November 10, 2025, paving the way for one of the most awaited listings in India’s financial services space.

The SBI Funds Management IPO is likely to be completed in 2026, subject to favorable market conditions and regulatory clearance timelines. Analysts anticipate strong investor interest given the company’s solid performance and dominant market presence.

Financial Performance Highlights of SBI Funds Management

SBI Funds Management, a joint venture between State Bank of India and Amundi Asset Management, is one of the largest mutual fund houses in India with a vast retail and institutional investor base.

For the financial year 2024–25, the company reported a total income of ₹4,231 crore, accounting for 0.64% of the total income of the SBI Group. Additionally, its reserves and surplus stood at ₹5,108.5 crore, which represents 1.2% of the SBI Group’s total reserves.

The financial metrics underline the company’s strong fundamentals and profitability within the competitive asset management industry, making the IPO a potentially attractive proposition for investors.

SBI Shares Trade Marginally Higher Post Announcement

Following the announcement, SBI shares were trading marginally higher at ₹957.7 apiece on the Bombay Stock Exchange around 1:20 PM on November 6. The positive movement reflected investor optimism over SBI’s continued efforts to unlock value from its subsidiaries and maintain strong capital discipline.

Market experts suggest that the SBI Funds Management IPO could serve as a catalyst for boosting the lender’s valuation and provide further liquidity for expansion and digital initiatives.

SBI’s Strategic Focus on Value Creation and Diversification

This stake sale aligns with SBI’s strategy of value unlocking and capital optimization, as the bank continues to diversify its business portfolio beyond traditional banking. Over the years, SBI has built a robust ecosystem across insurance, asset management, and capital markets.

SBI’s move comes at a time when the mutual fund industry is witnessing rapid growth, supported by increased retail participation and rising investor confidence in equity and debt markets. The IPO of SBI Funds Management will also position the company to pursue future expansion, technology investments, and product diversification.

Industry analysts also view this decision as part of a broader trend among large financial institutions to list their profitable subsidiaries, offering transparency, liquidity, and improved market valuations.

Investor Outlook: A Strong IPO Pipeline Ahead

With this announcement, SBI joins a growing list of Indian financial institutions preparing for landmark IPOs in 2026. Given SBI Funds Management’s market leadership and consistent financial performance, the IPO is expected to attract strong interest from both domestic and foreign investors.

If successful, the offering could emerge as one of the largest asset management IPOs in India, further deepening the country’s capital markets and boosting investor confidence in the financial sector.

Conclusion

The State Bank of India’s decision to divest a 6.3% stake in SBI Funds Management via IPO marks a pivotal move in its strategic roadmap toward capital efficiency and shareholder value creation. With the IPO framework expected to be signed by mid-November and the listing targeted for 2026, all eyes are now on how this offering will reshape the landscape of India’s asset management industry.

• Nifty 50
• Bank Nifty
• Sensex