SBI Funds Management Limited is set to select investment banks soon to manage its public issue, raising at least $500 million from India’s top asset management company.
The joint venture between State Bank of India (SBI) and France’s Amundi Asset Management received bids from several investment banks earlier this week, three bankers said, requesting anonymity. The banks were responding to a request for offer (RFP) issued by SBI Fund to handle the initial public offering (IPO). Banks had time to submit bids till Wednesday.
“Most of the top banks—domestic and foreign—who have met the RFP criteria have applied for the IPO,” said one of the three bankers. “SBI Funds will now invite bidders for presentations, following which they will select a syndicate to manage their IPO. The submissions are likely to take place before the end of this month or early next month.”
SBI Funds listing schemes come amid record inflows 24,989.57 crore in equity mutual funds in December, more than double of November 10,686.77 crore, despite the growing threat of a third Covid wave crippling the country’s nascent economic recovery from the first two waves of the pandemic.
Monthly systematic investment plans contribution to mutual funds also broke records 11,305.34 crore in December as compared to previous high 11,004.94 crore in November, according to data released by Association of Mutual Funds in India.
As per the RFP document, the interested bidders should have handled at least five domestic IPOs (Initial Public Offerings) / Follow-on Public Offerings / Qualified Institutional Placements. 2,500 crore or more each, and in the aggregate, 25,000 crore or more in the banking, financial services or insurance sectors between 1 April 2017 and 30 September 2021.
Earlier, the company had indicated that the IPO would involve sale of a combined 10% stake by SBI and Amundi. SBI will sell 6% and Amundi will sell the rest.
However, the RFP document states that the size and composition of the IPO may vary, depending on factors such as shareholders’ judgment and management discretion.
The company has not yet disclosed the size of the offering. However, the second banker cited above said the IPO could be at least $500 million.
Emails sent to SBI Funds remained unanswered till press time.
SBI currently holds 62.63% in SBI Funds, and the remaining 36.78 per cent, is held by Amundi through its wholly owned entity, Amundi India Holding.
Headquartered in Mumbai, SBI Fund is the largest mutual fund in India in terms of assets under management (AUM). Its average AUM was 5.79 trillion in the September quarter as per the RFP document.
SBI Funds will be the fourth mutual fund manager to tap the primary market after HDFC Asset Management, Nippon Life India Asset Management and UTI Asset Management Company Ltd.
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