SBI Funds Management Ltd. may file draft papers for an initial public offering next month, according to people familiar with the matter, in what could be the biggest listing by an asset management company in India.
The nation’s biggest asset manager plans to submit its draft red herring prospectus for the IPO that could raise as much as $1.5 billion in the first half of March, the people said, asking not to be identified because the information is private.
SBI Funds is targeting a valuation of as much as $15 billion, one of the people said. That would be a shade lower than ICICI Prudential Asset Management Co.’s current valuation of $16.7 billion, following a $1.2 billion IPO in December by India’s second-largest asset manager.
Deliberations are ongoing and details of the offering, including size and timing, could change, they said.
A representative for SBI Funds didn’t respond to requests for comment.
The planned share sale comes as India’s market for first-time public offerings slows after two consecutive years of record fundraising. Weaker equity markets have weighed on valuations, and recent listings — including those of lender Aye Finance Ltd. and data analytics firm Fractal Analytics Ltd. — have seen subdued demand.
SBI Funds has appointed Kotak Mahindra Capital Co., Axis Bank Ltd., SBI Capital Markets Ltd., Motilal Oswal Investment Advisors Ltd., ICICI Securities Ltd., JM Financial Ltd., and local units of HSBC Holdings Plc, Jefferies Financial Group Inc. and Bank of America Corp. to manage the share sale, the people said. Citigroup Inc. and JPMorgan Chase & Co. had earlier. opted out of advising on the IPO due to low fees.
SBI Funds, with total assets under management of 12.5 trillion rupees, is jointly owned by State Bank of India and Amundi SA. The partners said last year they plan to sell a combined 10 per cent stake through an IPO.
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