Despite the dip, the company continues to command a strong market valuation, with its market capitalisation standing at around Rs 1.24 lakh crore.
The stock’s debut, while positive, was slightly below investor expectations built around the grey market premium (GMP). Before listing, unlisted shares of SBI Funds Management were reportedly trading at a premium of 16-18% over the IPO price, according to grey market tracking platforms. The actual listing gain, however, settled at a more moderate level.
Brokerages remain bullish on SBI Funds Management
Brokerages have maintained a positive outlook on the stock, citing the company’s strong parentage, growth prospects and India’s rising mutual fund penetration.
Emkay Global Financial Services initiated coverage on SBI Funds Management with a ‘Buy’ recommendation and assigned a target price of Rs 750 per share. The target indicates a potential upside of nearly 31% from the IPO price of Rs 574.
The brokerage highlighted three key factors supporting its bullish view. First, SBI Funds Management benefits from the strength of the SBI brand and its extensive distribution network, while there remains significant room to increase mutual fund penetration through the SBI Bank channel.
Second, the continued shift in the company’s asset mix towards higher-yielding segments such as equities and alternative investments, including AIFs and PMS products, is expected to improve revenue growth.Third, Emkay expects operational efficiencies driven by scale to support earnings growth, projecting a 17% EBITDA CAGR between FY26 and FY29.“As the savings and investment needs of Indians evolve, the middle class is increasingly embracing mutual funds as its core investment vehicle, and SBI AMC has all the ingredients to become ‘the asset manager to every Indian,’ just as its parent has become ‘the banker to every Indian’,” Emkay said.
Equirus Securities sees long-term growth potential
Equirus Securities also initiated coverage on SBI Funds Management with a ‘Long’ rating and set a March 2027 target price of Rs 675 per share, indicating an upside of around 18% from the issue price.
The brokerage described SBI Funds Management as one of India’s strongest asset management franchises, supported by its large scale, SBI’s nationwide distribution network, stable SIP inflows and robust profitability.
Equirus believes the company is well positioned to benefit from India’s financialisation trend, as household savings increasingly move towards mutual funds, systematic investment plans (SIPs) and market-linked investment products.
With strong institutional backing and favourable industry tailwinds, analysts expect SBI Funds Management to remain a key beneficiary of India’s growing investment culture despite short-term volatility in the stock.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
