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manisha Kolvenkar made post

Can SBI mutual fund get the same valuations for the AMC business like the HDFC AMC, if it were to get listed?

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abhishek nair answered.
9 months ago


One more think I want to add that SBI mf is growing is because SBI branches are doing good for garning AUM for MF business and it's very chellanging for all distributor and you know the rural branches are more for SBI in terms of customers all very high as compared to any banks in India market is not giving value for the stock just because of NPA but long term story is intact. as soon as SBI mf git the market


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Mahima Roy answered.
9 months ago


A listing of SBI MF will not only make sense to the fund and give it currency, but also help the SOTP valuations of the SBI parent. SBI MF currently has an AUM of Rs.321,000 crore but the equity AUM of SBI MF is larger than HDFC AMC and ICICI Pru AMC. Normally, the equity AUM is the key driver of valuation. From that perspective, SBI MF should get a valuation that is at least close to what HDFC AMC has been commanding. Today, State Bank of India is available in the stock market at a market cap of Rs.295,000 crore. At that price you can get a substantial ownership in SBI Life (valued at Rs. 100,000 crore) and 100% stake in SBI MF. That means the SOTP should make the stock of SBI a lot more attractive. SBI MF has been one of the fastest growing funds in India and in the last 2 years it has entered the top-3 league. Listing SBI MF will enhance the currency of the fund and the SOTP valuations of SBI.

But to get the benefit, SBI may have to move much faster. Time is the essence for the IPO so if is really planning to list its mutual funds business, the time is now. Waiting for 2 years may not make sense as a lot could change by then. Today, there is an appetite for strong AMC stocks just like for insurance stocks. SBI would do well to move on a war footing and push its IPO through quickly. The AUM and the valuations are in favour of an AMC listing and the time is now. In short, the SBI Fund and the SBI group would benefit substantially from the listing of SBI Mutual Fund in the stock exchange.