SBI Mutual Fund: India’s Most Dominant AMC and a High-Growth Compounde... SBI Mutual Fund: India’s Most Dominant AMC and a High-Growth Compounder Ahead of Its 2026 IPO Read more

INTRODUCTION 

SBI Funds Management Ltd. (SBIFML), India's largest fund manager by assets under management (AUM), has built upon its more than 36 years of heritage as a success distinction through superior financial performance, penetration into retail channels and a solid commitment to providing market-leading, innovative, responsible and ethical investment products. With an IPO on the horizon in 2026, SBIMF is well ahead of its peers and continues to lead by example through its establishment in the evolving financial services industry in India, as well as being the best position for a long-term investment vehicle and for consistently delivering returns.

FY 2024-25 has been one of the most critical years for SBIFML to expand its platform as both a corporate and investment manager. The company maintained strong profitability while broadening the number of retail investors by successfully launching a diversified range of product offerings, having digitised the investment process through its digital platform and has focused on executing its corporate social responsibility to achieve the mission of financial inclusion. SBIFML has developed a unique value proposition to enable individuals to have a long-term perspective of their financial growth, which has allowed the company to achieve significant milestones each year through investment product innovation, industry-first initiatives and expanding into new markets.

India has recently experienced a significant growth in the number of SIP participants, retail participants in equity and the explosion of passive funds. As the largest mutual fund in India, it was the largest mutual fund in the country that played the largest role in this transformation. 

Key Financial Performance Metrics for FY2024-25 are as follows: 

• -AUM: ₹26.20 Lakhs Crores 
• -Total Income: ₹4,232 Crore 
• -Profit After Tax: ₹2,531 Crore – represents 23% growth YoY 
• -New Investors: 62 Lakhs + 
• -New Schemes: 12 
• -Capital raised from New Schemes: ₹18,420 Crore 
• -New Scheme Applicants: 10.74 Lakhs. 

This increase in profitability is representative of a multi-year trend in which SBI MF has demonstrated significant increases in profitability. In FY 21, PAT increased from ₹ 860 crores to ₹ 2,531 crores in FY 25 (an almost 3x increase over 5 years). 

- SBI MF’s total AUM has grown very strongly from ₹12.7 lakh crore in 2021 to ₹26.3 lakh crore in 2025, nearly doubling in just four years, showing rapid expansion and strong investor inflows.

Asset Mix Transformation 

The asset allocation of SBI MF has changed to reflect a greater preference by investors for long-term wealth creation. Asset Mix Change Over March 2020 through to March 2025 

• Equity: 53% to 76% 
• Debt: 29% to 16% 
• Liquid: 18% to 8% 

The shift in asset allocation highlights the increasing conviction of investors in the growth potential of India and equity markets.

• Vision - To be the most respected and trusted asset manager.
• Mission - To provide ethical, responsive and innovative investment solutions to clients.

Corporate Structure: The SBI x Amundi Partnership

SBI Mutual Fund (SBI MF) is a joint venture between SBI (62%), India's largest bank, with the largest distribution network, and Amundi (36%), Europe's largest asset manager, who bring its global investment capabilities to the partnership.

The combination of these two organisations brings to the partnership a strong local presence and access to the best investment practices globally, forming a disciplined and research-focused Asset Management Company (AMC) that adheres to a sound governance model.

Subsidiaries and Associates

• SBI Funds Management (International) Ltd, Mauritius, provides offshore fund management to products such as the SBI RIO Fund and the SBI IO Fund.
• SBI Funds International (IFSC) Limited, GIFT City - manages the SBI Investment Opportunity Fund.
• SBI Pension Fund Pvt Ltd (20% severity) - one of the largest registered pension fund managers in the National Pension System (NPS).

By conducting business in multiple countries and with different regulatory environments, the Corporate Structure creates a broader platform for investment diversification and presents opportunities to develop new investment products that comply with local regulations.

Strategic Drivers Behind Growth

• Financial inclusion represents the last mile to access.

1. One key development was launching the JanNivesh SIP, which allows investors to invest from as little as ₹250. This initiative focuses specifically on rural and first-time investors by introducing mutual funds into India’s most underserved investment segments.

2. Accessing mutual funds through platforms like SBI YONO, Paytm, Zerodha, Groww, and others provides users with an easy way to do so.

• Product innovation represents the continued evolution of SBI Financial Markets Limited, offering new products to seize the opportunity created by changing market dynamics. Key Product Launches this year reflect the company's focus on capturing these opportunities through innovation:

- SBI Automotive Opportunities Fund – capturing Mobile movement and EV transition in India

- SBI Quant Fund – Focused on multi-factor quantitative investing

- SBI Silver ETF/FOF (Fund of Funds) – Provides investors with commodity diversification

- SBI Nifty IT Index Fund – Provides investors with a focused investment in India's IT Leaders

• Comprehensive Scheme Landscape

- 5 Money Market Funds

- 10 Market-Cap Oriented Equity Funds

- 31 Passive/Index Strategies

- 3 Fund-Of-Funds

- 10 Duration-Based Debt Strategies

- 42 Closed-Ended Schemes

The depth and breadth of developed product offerings that SBI has available solidifies the position that SBI is not only the most diversely funded but also offers the most diversified range of investment options to customers in India.

• Digital Transformation Will be a Major Contributor to the Growth of SBI Financial Markets Limited

1. Digital transformation is accelerating at a rapid rate. Almost 98 per cent of all transactions are processed digitally (by volume), and 83 per cent of all transactions (by value) are processed digitally.

2. Over the last 12 months, average unique logins from users accessing the InvesTap app and website have increased by 25 per cent.

3. Digital transformation continues to drive a significant increase in investor touchpoints due to partnerships between fintech companies and other brand partners within the mutual funds.

Financial Strength And Valuation 

A summary of SBI Mutual Fund's financial performance over the years, as follows:

• Revenues for SBI Mutual Fund increased from ₹1,437 crore in FY21 to ₹3,598 crore in FY25, representing a substantial CAGR over five years of approximately 26% due to significant AUM growth along with the increasing inflows into equities and their dominance in SIP's contributions.
• Operating profits (EBITDA) have grown significantly from ₹991 crore in FY21 to ₹2,774 crore in FY25, supported by large operating leverage and consistently high margins of between75%-80%, which confirms that the AMC business model is highly scalable.
• Net profits (PAT) are up from ₹863 crore in FY21 to ₹2,540 crore in FY25, with a remarkable 54.7% increase in FY24 followed by an additional 22.5% increase in FY25, demonstrating an upward trend of strong earnings.
• Earnings per share (EPS) have increased from ₹17.17 to ₹49.94 due to the consistent compounding of wealth for shareholders.
• The company has operated completely without any debt for the last five years, which provides complete stability, zero leverage risk and excellent balance sheet strength.
• Return on Equity (ROE) remained stable at close to 30% throughout the period with an excellent capital-efficiency return and strong profitability.
• SBI Mutual Fund's continued asset-light model allows for the highest possible Return on Assets (ROA) at or around 29%. The steady growth in AUM, as well as above-average margins and excellent cost control, creates high-quality long-term profits with low financial risk.
• The historical financial results will create a unique position for SBI Mutual Fund by providing the highest combination of value, profitability, operational efficiency, and stability. SBI Mutual Fund should be considered as one of the best financial services companies to invest in the Indian market.

PEER COMPARISON

• The State Bank of India (SBI) has a stronghold in the market for asset management companies (AMCs) in India, and it also exhibits a distinct advantage over other AMCs, such as HDFC and Nippon. Because of its position, SBI has superior profits, size and distribution models than those providers.
• In addition to being dominant in the AUM category with ₹26.3 lakh crores, SBI's market capitalisation is also substantially higher than other competitors with approximately ₹1.37 lakh crore, while HDFC, Nippon and PPFAS Mutual Funds show market capitalisations of ₹1.14 lakh crore, ₹54,715 crore and ₹12,891 crore, respectively. SBI's larger volume makes it conceivable that they will maintain superior levels of investor confidence and remain dominant leaders in the marketplace. Furthermore, with their increased size and volume, SBI has greater strength as a source of revenue and thus greater benefits from the use of operating leverage and a consistent flow of clients even during times of extreme volatility in the market.
• According to valuation ratios, SBI MF has a price/earnings multiple (P/E) of approximately 54x, which is higher than HDFC Asset Management Company (HDFC) at 41.6x and Nippon India Asset Management Company (Nippon) at 40.9x, but it is also similar to PPFAS Mutual Funds Preliminary Private Limited (PPFAS) at 52.2x The high valuations that SBI MF commands should be attributed to the company's leading position in the marketplace, higher profit margins and improved distribution capabilities, and a recurring revenue stream driven by systematic investment plans (SIPs). The P/B ratio of SBI MF is also the highest amongst most of its peers at sixteen point five times and demonstrates good returns on equity and efficient use of capital.
• Concerning growth rates, the Revenue of SBI MF was a strong 33.7%  year over year (YoY) compared to HDFC AMC's growth rate of 28.2%  YoY and Nippon's 35.8% YoY growth rate. However, what sets SBI MF apart from others is its absolutely unrivalled Profit After Tax (PAT) margin, which is 70.6% at SBI MF, compared to 6.8% PAT margin at HDFC AMC and 57.6% PAT margin at Nippon.
  
• The operating efficiency and cost structure of SBI Mutual Fund (MF) are unique and a strong competitive advantage. In terms of profitability statistics, SBI MF has a return on equity (ROE) of 30.6% and a return on capital employed (ROCE) of 31.8%. Both measures are extremely strong and stable; however, both ratios are slightly lower compared to boutique firms such as PPFAS, as the latter benefit from having a smaller AUM and concentrated strategies. HDFC Asset Management Company (AMC) and Nippon India Mutual Fund (MF) both yield very strong ROCE at above 40%, but SBI MF has proven to deliver consistent ROCE over a much larger scale, which provides for a more resilient structure to create continued growth.
• SBI MF has proven to deliver superior combined performance than any other mutual fund player on a scale, profit potential, number of product offerings, distribution capability, and sustainability. SBI MF is the only victor of the industry that balances institutionally based AUM with mass access on a retail level.

Future Growth Projections 

SBI Mutual Fund has created three distinct future projections for the period ending FY30 based on an assumption of conservative to optimistic views: Bear Case, Base Case and Bull Case. The basis for these projections is SBI Mutual Fund's dominant position in the Indian equities market, the increasing trend of financialisation in India over time and the expected ongoing growth trend. 

Revenue growth - SBI MF’s revenue growth is based on HDFC AMC’s 18.3% estimate, adjusted for SBI MF’s higher market share, giving 13% in the bear case, and increased in the base and bull cases to reflect its stronger position

PAT Margin Assumptions - Estimated at 70%, 72%, and 74% (Bear/Base/Bull) — driven by efficiency gains and recurring revenue growth.

With all the above assumptions, Projected Financial Outcomes through FY30 

• Revenue for SBI MF is projected to be approximately ₹6,629 crores - Bear Case, ₹6,927 crores - Base Case, and ₹7,236 crores - Bull Case.
• Net Profit (PAT) across all three case scenarios is expected to grow within the range of ₹4,680 crores - ₹5,355 crores till FY30
• Market capitalisation is projected to be between ₹2.5 lakh crores - ₹3.0 lakh crores.
• The estimated price range per share of SBI MF will be between ₹4,970 - ₹5,901, and the estimated five-year returns will be between 84% and 119%

SBI MF will continue to deliver strong double-digit annualised returns based on conservative estimates of future market growth through ongoing expansion of assets under management and solid earnings from its managed funds.

In addition to sustainable earnings in the future, SBI MF will remain a highly visible compound growth story for the foreseeable future, even in less-than-ideal economic conditions.

Corporate Social Responsibility 

• SBI MF continues to make investments in local communities in support of developing healthy communities through healthcare, education, and vocational training. Here are a few examples of recent initiatives carried out by SBI MF:
• 26 million women in India benefited from Digital Mammography Machines
• 12 government schools in the area are utilising 12 STEM (Science, Technology, Engineering, and Math) laboratories
• Over 3,600 rural youth have participated in vocational skills-development programmes delivered through SBI MF
• These initiatives are an extension of SBI MF's commitment to growth through inclusive development.

Conclusion: 

The most successful Asset Management Company (AMC) in India is SBI Funds Management. SBI MF is positioned to take advantage of the next multi-decade opportunity of Financialisation in India due to the unique elements that can be found in the AMC itself. From the strong distribution network via SBI to the first-class governance of a Global Company (Amundi), the diversified range of the product portfolio, the high level of digital facilities, and the excellent and continuing track record of performance from a Financial Perspective, SBI MF can compete against other AMCs in India and be a leader in the new era of Financialisation.

Peering through to 2026, the IPO of SBI MF will not only represent the largest in terms of Assets under Management (AUM) in India, but also the best-positioned, most complete, and scalable AMC, and future-proof. Therefore, for Investors, Policymakers, and Participants within the broader Financial Ecosystem, SBI MF combines the very best with Scale, Resilience, Efficiency, Innovation, and high-margin growth.