India's billion-dollar initial public offerings have delivered uneven returns over the past few years, with several of the country's largest issues leaving investors with heavy losses. SBI Funds Management, which opened its 9,813 crore IPO on Tuesday, will now test whether a profitable market leader with strong parentage can improve that record.
An analysis of 13 large IPOs shows that eight are trading above their adjusted issue prices, while five remain in the red as of July 13. The median return for the group is just over 2%, showing that the gains have been concentrated in a few stocks.
How India's billion-dollar IPOs performed
Eternal is the biggest winner among IPOs that raised over Rs 9,000 crore, rising 275% from its issue price. HDFC Life Insurance and Coal India have also delivered strong gains, while Tata Capital has gained about 11%.
At the other end, New India Assurance has lost 77% from its adjusted issue price, while NMDC is down 72%. General Insurance Corporation, Life Insurance Corporation of India and One97 Communications are also trading well below their offer prices.
Hyundai Motor India, India’s largest IPO, is up less than 2% nearly two years after listing. HDB Financial Services is also only marginally above its offer price.
Size has offered little protection
The performance shows that a large issue size and a well-known brand have not ensured investor returns. Valuation at the time of the offer, earnings growth after listing and the nature of the business have played a larger role.
Several large public-sector offerings were priced at levels that investors later found difficult to justify. New-age companies such as One97 Communications also struggled as markets demanded a clearer path to profitability after listing.
The stronger performers generally had established businesses, improving earnings or long periods in which profits caught up with their IPO valuations. Eternal is a prominent example, though its gains came after considerable volatility following its listing.
Also Read: SBI Funds Management IPO: How SBI shareholders can improve chances of allotment
SBI Funds enters with strong financials
SBI Funds Management is India’s largest asset management company by mutual fund quarterly average assets under management. It managed 12.5 lakh crore as of March 2026 and had a market share of 15.3%.
Its revenue from operations rose 22% to 4,389 crore in FY26, while profit increased to 3,067 crore. The company reported an EBITDA margin of 79% and return on equity of about 51%.
The IPO is entirely an offer for sale by State Bank of India and Amundi. SBI Funds will not receive any proceeds from the issue. The price band has been fixed at 545-574 per share, valuing the company at around 1.17 lakh crore at the upper end.
Analysts see strengths, but valuation leaves less room
Nirmal Bang said SBI Funds' market leadership, wide distribution network, profitability and favourable industry outlook support the investment case.
At the upper end of the price band, the IPO is valued at 38.1 times FY26 earnings and 33.6 times enterprise value to EBITDA. Nirmal Bang said this was lower than the valuations of some listed peers, including HDFC Asset Management and ICICI Prudential Asset Management.
Anand Rathi also said the company’s scale, asset-light business model, retail franchise are the combined strengths along with support of SBI and Amundi. It, however, described the issue as fully priced.
That may determine whether SBI Funds can produce better returns than many previous billion-dollar IPOs. Its financial performance is stronger than that of several loss-making companies that entered the market with large offers. Still, a high-quality business can deliver weak shareholder returns when investors pay too much at the start.
The company also faces risks from market declines, investor redemptions, pressure on management fees and the shift towards lower-fee passive products. Its earnings remain closely linked to assets under management and capital-market conditions.
SBI Funds has the scale, profitability and distribution reach to challenge the poor record of several large IPOs. Its eventual returns, however, will depend on whether earnings can grow fast enough to support the valuation at which investors are entering.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
