Strong bet! SBI Mutual Fund investors already sitting on 3x returns ahead of IPO launch

Investors who bought SBI Mutual Fund's unlisted shares about three years ago are already sitting on nearly four-fold returns, even before the country's largest asset manager launches its much-awaited initial public offering.

The wealth creation has come through a sharp appreciation in the stock price as well as a bonus issue. SBI Mutual Fund's unlisted shares, which traded around Rs 900 three years ago, climbed to nearly Rs 2,800 before the company announced a 3:1 bonus issue. Following the bonus adjustment, the shares are currently changing hands at around Rs 858 in the unlisted market, translating into an effective return of about 3.8 times for early investors, according to UnlistedZone.

The gains have come ahead of the company's planned public listing, which is expected to hit the market in the first week of July. The company has already received Sebi's approval for the IPO, clearing one of the final regulatory hurdles before the issue opens.


The proposed IPO is expected to raise around Rs 10,000 crore, with parent State Bank of India and joint venture partner Amundi likely to pare part of their holdings through an offer for sale. The listing is expected to be one of the biggest in India's asset management industry.

SBI Mutual Fund is India's largest fund house by assets under management and has been a key beneficiary of the sustained rise in domestic equity investing. Strong inflows through systematic investment plans (SIPs), growing retail participation and expanding financialisation of household savings have helped the company strengthen its market leadership.

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The sharp rally in its unlisted shares reflects investor optimism around the company's dominant market position, strong profitability and long-term growth prospects. However, market participants caution that the run-up in the unlisted market also means much of the optimism may already be reflected in the current price.

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