SBI Funds IPO crosses 40x subscription on final day
What's the story
The initial public offering (IPO) of SBI Funds Management has witnessed a stellar response on its final day of bidding. The ₹9,813-crore IPO was subscribed over 40 times as of 4:00pm today, according to NSE data. The Non-Institutional Investors (NIIs) segment led the demand with a subscription rate of 22.47 times while Qualified Institutional Buyers (QIBs) and Retail Individual Investors (RIIs) categories were subscribed by 140.11 times and 3.45 times, respectively.
Market sentiment
Grey market premium indicates strong listing for the shares
The gray market premium (GMP) for the SBI Funds Management IPO is ₹92 per share, according to Investorgain and IPO Watch.
This indicates a potential listing gain of about 16% over the upper end of the price band of ₹574, suggesting a listing price of around ₹662 per share.
The company has fixed its IPO price band at ₹545-₹574 per equity share.
IPO details
Brokerages give thumbs up to SBI Funds Management IPO
The public issue is a complete Offer for Sale (OFS) of 20.37 crore equity shares, which means the company won't get any money from the offering.
The entire sum will go to selling shareholders, State Bank of India (SBI) and Amundi India Holding.
Brokerages have given a thumbs up to the IPO with Swastika Investmart rating it 'Subscribe' due to its asset management leadership, strong profitability, and reasonable valuations.
Brokerage recommendation
Geojit Financial Services recommends 'Subscribe' rating to IPO
Geojit Financial Services has also recommended subscribing to the SBI Funds Management IPO.
They noted that at the upper price band of ₹574, SBI Funds Management is valued at a price-to-earnings (P/E) ratio of 38x, which is moderately lower than its peers.
The basis of allotment is expected to be finalized on July 17, with shares expected to debut on NSE and BSE on July 21.