SBI Mutual Fund IPO planned for 2026, confirms chairman CS Setty

CS Setty, the chairman of India’s largest lender, has confirmed that the bank aims to complete the initial public offering of SBI Mutual Fund in the next 12 months. In an interaction with The Economic Times, he said: “Our focus is on completing the IPO of SBI Mutual Fund within 12 months. No plans for other IPOs or stake sales.”

When asked if SBI would need fresh capital, Setty said not for the next five years. With a capital-to-risk-weighted assets ratio (CRAR) at 15% and common equity Tier 1 (CET1) at 12%, SBI can support 12–13 lakh crore credit growth over five years without any equity dilution proceeds from the mutual fund IPO. Even considering expected credit loss (ECL) norms, the bank has adequate buffers. The company’s annual profits of Rs 70,000–80,000 crore can support this growth.

On IPOs, the veteran banker said It is important to realise that today India needs a lot of good companies to invest in. There is a lot of money flowing into the stock market, and if there aren’t enough in the universe of investing companies, investors are investing in the same ones repeatedly. “I think it is important that diversified companies are listed on the exchanges. As for pricing and valuation, they are like beauty in the eyes of the beholder. So, it is all about who is looking at that investment.” Setty said.


Speaking on increased FII limits in PSU banks, he said that higher limits would add value. Investors want headroom, even if the existing limit is not fully utilised in some banks. “We have represented this to the government, the largest shareholder in PSU banks.”

SBI Mutual Fund, the biggest fund house, has initiated the process for the appointment of merchant bankers and other service providers to facilitate an initial public offering (IPO). The boards of respective shareholders, like SBI and Amundi, and the board of SBI Funds Management Ltd (SBIFML) have approved a timeline of 12 months.

"We are very seriously working on that, and in this timeline we should hit the market...we have started the process of identifying the merchant bankers and other service providers," Setty, who is also chairman of SBIFML, said.

The company's two promoters plan to sell a combined 10% stake through the public offering. Last month, SBI approved the offloading of 3,20,60,000 equity shares, equivalent to 6.3% of the total equity capital of SBIFML through IPO.

Also read: Nifty’s Santa rally isn’t just folklore: Why smallcap stocks could steal the spotlight this year-end

Amundi India Holding, the other promoter of SBIFML, will divest 1,88,30,000 equity shares, being equivalent to 3.70% of the total equity capital of SBIFML, with a total of 10% stake comprising 5,08,90,000 shares to be listed.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)