Investors holding shares of State Bank of India (SBI) will be eligible to apply under a dedicated shareholder reservation category in the upcoming SBI Funds Management Ltd. initial public offering (IPO), which opens for subscription on July 14.
SBI Funds Management has fixed the price band for its Rs 11,692.91 crore IPO at Rs 545-574 per share. The issue, which is entirely an offer for sale (OFS) of up to 203.71 million equity shares with a face value of Re 1 each, will be the largest IPO of 2026 so far. At the upper end of the price band, the asset management company is expected to command a market capitalisation of nearly Rs 1.17 lakh crore.
SBI Shareholder Quota
The IPO reserves up to 13.06 million equity shares, or 6.41% of the total offer size, for eligible SBI shareholders. Based on the upper end of the price band, the reserved portion is worth nearly Rs 750 crore.
Unlike some public issues that offer a concession to retail investors, SBI shareholders will not receive any discount on the issue price. Eligible shareholders must bid within the prescribed price band.
Applications under the shareholder category can only be made through the Applications Supported by Blocked Amount (ASBA) process, including the UPI mechanism. Investors bidding under the shareholder reservation portion will have their bid amount blocked in their bank account at the time of application.
Employee Reservation
The IPO also includes a reservation for eligible employees. Shares worth around Rs 170 crore have been earmarked for eligible SBI employees, who will receive a discount of Rs 54 per share while bidding.
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In addition, up to 270,271 equity shares have been reserved for eligible SBI Funds Management employees, while up to 2.99 million equity shares have been reserved for eligible SBI employees.
SBI Stake To Decline
Following the completion of the IPO, SBI's stake in SBI Funds Management is expected to reduce to 88.19% from the current 98.19%, although the country's largest lender will continue to remain the majority shareholder.
The public issue is entirely an offer for sale, meaning SBI Funds Management will not receive any proceeds from the IPO. Instead, the proceeds will go to the selling shareholders.
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