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The initial public offering (IPO) of SBI Funds Management will close for subscription on Thursday, July 16, following massive demand from both institutional and non-institutional investors. The Rs 9,795-crore public issue is priced between Rs 545 and Rs 574 per equity share, with investors required to apply for a minimum of 26 shares and in multiples thereof.

This IPO is entirely an offer for sale (OFS), with existing shareholders    (SBI) and Amundi offloading up to 17.09 crore equity shares. At the upper end of the price band, the issue is valued at approximately Rs 9,795 crore. The IPO was originally planned at Rs 11,693 crore but was scaled down following a pre-IPO placement that raised nearly Rs 1,880 crore. Based on the upper price band, SBI Funds Management commands an estimated valuation of around Rs 1.2 lakh crore.

Subscription Momentum Builds Across Investor Categories

As of 1:00 pm on the final day of bidding, the IPO had been subscribed 7.77 times overall.

The category-wise subscription stood at:

The issue had already crossed full subscription on the second day of bidding. According to NSE data, the IPO was subscribed 2.77 times on Wednesday after receiving bids for 34,54,27,290 shares against 12,45,63,536 shares available for subscription.

Among investor categories, the non-institutional segment recorded 6.58 times subscription, while the retail portion was subscribed 1.61 times. The quota reserved for Qualified Institutional Buyers (QIBs) attracted 1.50 times subscription by the end of Day 2.

Anchor Investors Back The Public Issue

Ahead of the IPO opening, SBI Funds Management mobilised Rs 2,663 crore from anchor investors. The anchor book featured participation from prominent international investors, including GIC, Abu Dhabi Investment Authority, Capital World Investors, BlackRock, Fidelity Management & Research, Goldman Sachs Asset Management and Norges Bank.

On the domestic side, major institutions such as Life Insurance Corporation of India (LIC), HDFC Mutual Fund, ICICI Prudential Mutual Fund, Nippon India Mutual Fund and HDFC Life Insurance also participated.

Among the largest allocations, HDFC MF and ICICI Prudential MF received shares worth Rs 200 crore each, while Capital World Investors, GIC and LIC were allotted shares worth Rs 180 crore each.

Domestic mutual funds contributed 37 per cent of the anchor book, with investments made through 70 schemes managed by 23 mutual funds.

Grey Market Premium Signals Positive Listing Expectations

According to Investorgain, the grey market premium (GMP) for SBI Funds Management stood at Rs 94 as of 1:00 pm on July 16. Based on the upper price band of Rs 574, the estimated listing price works out to around Rs 668, suggesting a potential listing gain of nearly 16.38% per share.

Following the offer for sale, SBI's stake in the asset management company will reduce from 61.76 per cent to 55.46 per cent, while Amundi's shareholding will decline to 32.56 per cent.