In the last few years, India’s billion-dollar IPOs have given mixed returns, and investors have suffered huge losses in many of the country’s biggest IPOs. SBI Funds Management, which launched its Rs 9,813 crore IPO on Tuesday, will now see if a market leader with a strong parent company and a profit-making company can better this record.
Analysis of 13 big IPOs shows that eight IPOs are trading above their adjusted issue price, while five IPOs have been in loss till July 13. The median return of this group is a little more than 2 percent, which shows that profits have been limited to a few stocks.
How was the performance of India’s billion dollar IPO?
Among the IPOs that raised more than Rs 9,000 crore, ‘Eternal’ has been the biggest gainer, rising 275 percent from its issue price. HDFC Life Insurance and Coal India have also given good returns, while Tata Capital has gained about 11 percent. On the other hand, New India Assurance has lost 77 per cent from its adjusted issue price, while NMDC has declined 72 per cent. General Insurance Corporation, Life Insurance Corporation of India and One97 Communications are also trading well below their offer prices. India’s biggest IPO, Hyundai Motor India, has gained less than 2 per cent even after almost two years of listing. HDB Financial Services is also just a little above its offer price.
No more safety than size
The performance shows that the large issue size and well-known brand did not guarantee returns to investors. Valuation at the time of offer, increase in earnings after listing and nature of business have played a bigger role.
The price of IPO of many big public sector companies was fixed in such a way that later the investors could not accept it as right. New age companies like One97 Communications also faced difficulties as the market wanted a clear path to profit after listing.
Better performing companies generally had an already established business, were growing earnings or had long-term profits equal to their IPO valuation. ‘Eternal’ is a great example of this, although it got this benefit after a lot of ups and downs after listing.
Strong financial position with SBI funds
SBI Funds Management is India’s largest asset management company in terms of quarterly average assets under management (AUM) of mutual funds. By March 2026, it was managing Rs 12.5 lakh crore and its market share was 15.3 percent.
In FY 2026, its revenue from operations increased by 22 percent to Rs 4,389 crore, while profit increased to Rs 3,067 crore. The company recorded an EBITDA margin of 79 percent and a return on equity of approximately 51 percent.
This IPO is completely an ‘offer for sale’ from State Bank of India and Amundi. SBI Funds will not receive any money from this issue. The price band has been fixed at Rs 545-574 per share, which makes the valuation of the company at the upper level around Rs 1.17 lakh crore.
What are the experts saying?
In the ET report, Nirmal Bang said that SBI Funds’ market leadership, large distribution network, profitability and good outlook of the industry are in favor of investment. At the upper end of the price band, the IPO valuation is 38.1 times FY26 earnings and 33.6 times enterprise value to EBITDA. Nirmal Bang said that this is less than the valuation of listed companies like HDFC Asset Management and ICICI Prudential Asset Management.
Anand Rathi also said that the company’s scale, asset-light business model and retail franchise, coupled with the support of SBI and Amundi, are its strengths. However, he described the issue as ‘fully priced’.
This could decide whether SBI Funds can deliver better returns than many previous billion-dollar IPOs. Its financial performance is better than many loss-making companies coming into the market with big offers. Yet, even a good quality business can deliver weak shareholder returns when investors pay too high an initial price.
The company also faces risks from market downturn, redemptions by investors, pressure on management fees and the shift towards low-fee passive products. Its earnings are closely linked to assets under management and capital-market conditions.
SBI funds have the scale, profitability and distribution to challenge the poor record of many large IPOs. However, the benefits derived from this will depend on whether earnings can grow fast enough to maintain the valuations at which investors are investing money in it.
