Targets doubling international AUM to $5 billion; fund house banks on strong investor confidence

Mumbai

IPO-boundSBI Funds Management on Thursday exuded confidence in the largest asset manager’s Rs 11,600-crore maiden public equity offering sailing through despite prevailing market volatilities.

The entity, which declared a price band of Rs 545-574 per share for the initial public offering, is looking to double the international book to $5 billion in three years from the present $2.5 billion as part of a revenue augmentation plan, a top official said.

Citing the valuation sought by the fund house as seen from the pricing of the issue and conversations with larger investors, the company’s Managing Director and Chief Executive Debasish Mishra said the buzz has been good around the issue and the possibility of making good returns will attract investors.

“The market could be volatile, uncertain but a trust is always certain. So, that trust of the confidence of customers who are in the market (will help the IPO),” Mishra said. It can be noted that after a very strong FY25 which witnessed record issuances, IPO fundraisings have been lackluster since the beginning of the US-Israel campaign against Iran in late February.

SBI MF’s issue is one of the largest in recent times, and is set to be succeeded by mega issuances from largest stock bourse NSE and telco Jio Platforms.

Asked about the revenues being lower than the second largest fund house, the management explained that this is because of managing EPFO (Employee Provident Fund Office) money, where it makes a thinner revenue, but added that newer revenue streams are being chased along with reducing the share of EPFO money in the overall AUM. Mishra said the overall assets under management (AUM) of the company is over Rs 13 lakh crore, of which over Rs 3 lakh crore is EPFO money. Deputy MD and Joint CEO D P Singh said the fund house used to manage 75 per cent of EPFO’s money earlier, which has come down to 26 per cent. Regulatory restrictions on forms of business had restricted it from launching a portfolio management scheme for long but now the company has entered after a clarification from the RBI, he said, adding that international business is also very important. SBI MF has an international book of $2.5 billion at present and is aiming to double the same to $5 billion in the next three years as part of the strategy, Singh said, adding that it will carry this along with its joint venture partner Amundi, which has good presence globally and also by deploying staff in financial centres like New York, London, Hong Kong, and Singapore. Apart from this, it is also looking at the alternates business very seriously, and may also be open for growing in the line through an acquisition, Singh said.