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Brokerage firm Emkay believes SBI Funds Management is well-positioned to benefit from India's long-term mutual fund growth story, supported by three key structural drivers.
By Meghna Sen July 21, 2026, 9:00:19 AM IST (Published)
3 Min Read
Ahead of SBI Funds Management's stock market debut on Tuesday, July 21, brokerage firm Emkay Global initiated coverage on the asset manager with a 'Buy' rating and a price target of ₹750 per share. The target implies an upside of nearly 31% over the IPO price of ₹574 per share.
Emkay believes SBI Funds Management is well-positioned to benefit from India's long-term mutual fund growth story, supported by three key structural drivers.
First, the brokerage pointed to SBI's unmatched brand and distribution network, citing that the mutual fund business remains underpenetrated within the bank's customer base. SBI Mutual Fund currently serves around 5.5 million customers, compared with nearly 21 million salary account holders at State Bank of India
, providing a sizeable opportunity for future growth, particularly across B-30 cities and rural markets.
Second, Emkay expects a continued shift in the company's asset mix towards higher-yielding products, including equity schemes and alternative investment products such as AIFs and PMS, which should support revenue yields.
Third, it expects operating leverage driven by economies of scale to translate into an EBITDA CAGR of around 17% between FY26 and FY29.
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"As the savings and investment needs of Indians evolve, the middle class is increasingly embracing mutual funds as its core investment vehicle, and SBI AMC has all the ingredients to become 'the asset manager to every Indian', just as its parent has become 'the banker to every Indian'," Emkay said.
The brokerage values SBI Funds Management at 39x FY28 estimated earnings, broadly in line with larger listed peers such as ICICI Prudential Asset Management Company and Nippon Life India Asset Management.
However, it believes SBI AMC deserves a premium valuation, given the long runway for growth supported by SBI's brand, distribution reach and under-penetrated customer base.
Emkay flagged loss of market share within SBI's distribution network, sustained underperformance of investment schemes, prolonged weakness in equity markets and adverse regulatory changes as the key risks to its investment thesis.
IPO details
SBI Funds Management is scheduled to list on the stock exchanges on Tuesday after its ₹9,813-crore IPO received a strong response from investors.
The public issue was subscribed 41.66 times, led by robust institutional demand. The Qualified Institutional Buyers (QIB) portion was subscribed 140.11 times, while the Non-Institutional Investor (NII) category was booked 22.51 times. The Retail Individual Investor (RII) quota was subscribed 3.6 times.
The IPO was entirely an Offer for Sale (OFS) by State Bank of India and Amundi India Holding, implying that the company will not receive any proceeds from the issue.
Following the listing, the combined promoter holding is expected to decline to 89.8% from 98.2%, while public shareholding will increase to 10.2%, improving the stock's free float and liquidity.
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