Synopsis: Emkay Global initiated coverage on SBI Funds Management Limited with a ‘Buy’ rating and ₹750 target, citing strong distribution, earnings growth, and long-term mutual fund opportunities.
This Newly Listed Stock, engaged in managing mutual funds and investment solutions across equity, debt, hybrid, ETF, and portfolio management products, serving retail and institutional investors through a diversified portfolio across India, is in focus after Emkay Global Financial Services gave an Add target of Rs. 750, which has an upside potential of 22.97 percent.
With a market capitalization of Rs. 1,23,034.57 crores, the share of SBI Funds Management Limited has reached an intraday high of Rs. 625 per equity share, rising nearly 2.46 percent from its opening price of Rs. 610.
After listing, the stock reached a high before declining and is currently trading at Rs. 609.90 per share. The IPO was priced at Rs. 574 per share and listed at Rs. 613.30, delivering a 6.85 percent premium over the issue price on its market debut.
What is the News?
Emkay Global Financial Services, a prominent brokerage firm, has recommended a “Buy” call on SBI Funds Management Limited with a target price of Rs. 750 per share, indicating an upside potential of 22.97 percent from its previous day’s close price of Rs. 609.90.
Emkay Global has initiated coverage on SBI Funds Management Limited with a ‘Buy’ rating, saying the company is well placed to benefit from the long-term growth of India’s mutual fund industry. The brokerage believes SBI Funds Management has strong growth opportunities because of its trusted brand, wide distribution network, and large customer base through its parent, State Bank of India.
According to Emkay, SBI Mutual Fund currently serves around 5.5 million customers, while State Bank of India has nearly 21 million salary account holders. This large gap provides a significant opportunity to attract new investors, especially in B-30 cities and rural markets, where mutual fund penetration remains low.
The brokerage also expects the company to improve its earnings by increasing the share of higher-margin products, including equity mutual funds, Alternative Investment Funds (AIFs), and Portfolio Management Services (PMS). A better product mix is expected to support higher revenue and improve overall profitability in the coming years.
In addition, Emkay expects the company to benefit from operating leverage as assets under management continue to grow. It estimates an EBITDA CAGR of around 17 percent between FY26 and FY29, driven by economies of scale and rising investor participation in mutual funds. The brokerage believes SBI Funds Management has the potential to become the preferred asset manager for a large section of Indian investors.
Emkay has valued SBI Funds Management Limited at 39 times its estimated FY28 earnings, broadly in line with leading peers. However, it believes the company deserves a premium valuation due to its strong brand, extensive distribution reach, and long-term growth opportunities. Key risks include market share loss within SBI’s network, weak investment performance, prolonged equity market weakness, and regulatory changes.
IPO Details:
SBI Funds Management Limited launched its Rs. 9,795.32 crore IPO through a book-built issue, which consisted entirely of an offer for sale (OFS) of 17.10 crore equity shares. Since the issue was an OFS, the company did not receive any proceeds from the IPO.
The IPO opened for subscription on July 14, 2026, and closed on July 16, 2026. The shares were listed on both the NSE and BSE on July 21, 2026, with the final issue price fixed at Rs. 574 per share.
Products Portfolio:
SBI Funds Management Limited manages a diversified portfolio of 126 mutual fund schemes to meet different investment needs. Its offerings include equity and debt funds, arbitrage funds, exchange-traded funds (ETFs), index funds, overseas fund-of-funds, and liquid and overnight funds, giving investors a wide range of investment options across different asset classes.
Business Highlights:
SBI Funds Management Limited is one of India’s largest asset management companies. As of 2025, it managed around Rs. 16.32 lakh crore in assets, accounting for nearly 15.5 percent of the country’s total mutual fund assets under management (AUM). As of December 31, 2025, the company served more than 16.05 million investors, including both retail and institutional clients.
The company also has a growing international presence. It manages India-focused investment mandates for institutional investors in Japan, Australia, and Korea. In addition, it supports UCITS India-focused funds sponsored by Amundi, which are distributed across Europe, the Middle East, South America, and Southeast Asia. It also provides advisory services for Amundi’s Global Emerging Markets funds, managing India-related investment assets.
Company Overview:
SBI Funds Management Limited is engaged in managing mutual funds and investment solutions across equity, debt, hybrid, exchange-traded funds (ETFs), index funds, and portfolio management services (PMS). Established in 1992, the company is India’s largest asset management company by assets under management (AUM) and operates SBI Mutual Fund. It is a joint venture between State Bank of India and Amundi, serving millions of retail and institutional investors with a diversified range of investment products across domestic and international markets.
Recent Quarter Results:
Coming into financial highlights, SBI Funds Management Limited’s revenue has increased from Rs. 4,235 crore in FY25 to Rs. 4,966 crore in FY26, which has grown by 17.26 percent. The net profit has also grown by 20.75 percent from Rs. 2,540 crore in FY25 to Rs. 3,067 crore in FY26.
SBI Funds Management Limited’s revenue and net profit have grown at a CAGR of 25 percent and 29 percent, respectively, over the last five years.
In terms of return ratios, the company’s ROCE and ROE stand at 56.5 percent and 43 percent, respectively. SBI Funds Management Limited has an earnings per share (EPS) of Rs. 15.1, and it is a debt-free company.
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