MUMBAI: SBI Funds, the nation’s biggest asset manager, will be filing its draft IPO papers with the regulator Sebi by next month and the whole process will be completed by September, SBI chairman CS Setty has said.
Though the chairman did not say how much the company is looking to raise, various estimates put it north of $1,5 billion, making it the largest IPO by an asset management company in the country. Late last year, ICICI Prudential Life AMC had done a Rs 10,000 crore IPO through an OFS route wherein ICICI Bank did not participate.
“We are working onto file the draft papers by next month and want to complete the entire process within the September window,” the chairman told reporters on the sidelines of the 78th AGM of the banker’s lobby IBA here Friday.
SBI Funds, with assets under management of Rs 12.5 trillion, is jointly owned by State Bank of India and Amundi SA. The partners said last year they plan to sell a combined 10% stake through an IPO. In that sense it would also be an offer for sale only.
SBI Funds is targeting a valuation of as much as $15 billion, according to sources. That would be a shade lower than ICICI Prudential Asset Management Co’s current valuation of $16.7 billion, following a $1.2 billion IPO in December by the second second-largest asset manager.
The proposed share sale comes at a time when the IPO market has been slowing after two consecutive years of record fundraising. Last year the market mopped up close to Rs 1.9 trillion in record offerings. Weaker equity markets have weighed on valuations, and recent listings like non-bank lender Aye Finance and data analytics firm Fractal Analytics have seen subdued demand.
SBI Funds has appointed Kotak Mahindra Capital, Axis Bank, SBI Capital Markets, Motilal Oswal Investment Advisors, ICICI Securities, JM Financial, and the local units of HSBC Holdings, Jefferies Financial Group and Bank of America to manage the share sale, according to sources.
Citigroup and JPMorgan Chase had earlier opted out of advising on the IPO due to low fees. Typically government-owned companies don’t pay advisory fees nor i-bankers ask for as they consider being part of a government entity’s offering is an icing on their profile. Typically they take a solemn Re 1 as fee collectively.