SBI Funds’ dream IPO run is headed for a halt

SBI Funds Management, India's largest asset manager, recently completed its IPO, attracting investors who bid 41 times the offering price. The stock is expected to debut at Rs 670, representing a 17% premium over its IPO price. While this presents a good exit point for SBI Funds' backers—State Bank of India and Amundi—investors looking to purchase the listed stock may face limited upside.

Despite managing larger assets, SBI Funds has historically been valued lower than its peers due to weaker business performance. Nearly 58% of its assets under management come from portfolio-management services and advisory mandates, primarily from India's government-controlled retirement body, resulting in a relatively weaker business compared to the better-performing ICICI Prudential AMC.