Adia anchors India’s biggest asset manager as sovereigns and global funds pile into SBI Funds’ USD 1 bn IPO

The Abu Dhabi Investment Authority (Adia) has joined the anchor book for SBI Funds Management’s IPO, backing India’s largest asset manager alongside a slate of global institutional investors as the fund house prepares to launch its INR 98.1 bn (USD 1 bn) public issue, Bloomberg reports. The transaction size and value are yet to be disclosed.

The IPO has drawn strong interest from some of the world’s largest institutional investors — including Capital Group, BlackRock, Fidelity Investments, and Goldman Sachs Asset Management — alongside sovereign pools such as Adia, Singapore’s GIC, and Norway’s Norges Bank Investment Management.

Bankers are expected to allocate around 51 mn shares to anchor investors at the upper end of the price band of INR 545-574, raising some INR 29.4 bn (USD 309 mn) ahead of the issue. The anchor tranche was subscribed to more than 20x, the newswire adds.

What you should know: The price band implies a valuation of around INR 1.1 tn (USD 12.2 bn). The issue is entirely an offer for sale, meaning the proceeds will accrue to the selling shareholders rather than the company. The IPO kicks off tomorrow and will run through Thursday.

What’s new: The offer was originally sized at INR 116.9 bn (USD 1.2 bn), comprising 10% of the company’s equity. However, promoters State Bank of India (SBI) and Amundi India Holding reduced the issue by about 16% after selling 32.7 mn shares — in a pre-IPO placement — that raised INR 18.8 bn (USD 197.2 mn). As a result, the public offer has been resized to 171 mn shares, or 8.3% of the company.

For Gulf investors, the offering is a critical valuation benchmark for India’s financial services sector — a sign of continued sovereign appetite for Indian financial assets despite global market volatility.

At the upper end of the price band, SBI Funds is commanding a trailing price-to-earnings multiple of around 38x. The asset manager corners a 15.4% share of the mutual fund industry and has USD 131.1 bn assets under management.