Mumbai: The State Bank of India (SBI) is preparing for two of its potentially biggest asset unlocks this fiscal, which will raise its value by more than Rs 1 lakh-crore.
The first will be when it takes its subsidiary, SBI Funds Management, the country’s largest mutual funds company by assets, public. The bank filed a draft red herring prospectus with market regulator Securities and Exchange Board of India (SEBI) in March this year.
The second will be when the National Stock Exchange (NSE), in which the SBI group owns about 7.5 percent stake, launches its Initial Public Offering (IPO). The NSE is expected to file draft papers with the SEBI next month.
The SBI was one of the early institutional investors in NSE when it was set up in 1992 and the bank’s cost of acquisition of NSE’s shares was negligible.
“The scale of what is now unfolding—simultaneous listing of NSE (a national market infrastructure institution), and SBI Funds Management (one of India’s largest Asset Management Company (AMC) by Assets Under Management—is arguably without precedent for the SBI as a group,” Umesh Paliwal, the founder of Unlisted Zone, a platform to invest in unlisted shares, told ThePrint.
“If both listings materialise in FY26, the SBI Group could see a combined mark-to-market wealth creation of well over ₹1 lakh crore across the two assets—a once-in-a-generation kind of balance sheet event for the country’s largest public sector bank,” he added.
According to the latest report for the quarter ending March 2026, the SBI has 7.98 crore shares of NSE (or about 3.23 percent stake), while the SBI Capital Markets holds over 10.72 crore shares, amounting to a 4.33 percent stake.
In a post on X, AIM Investments, an investment consultancy firm, said Monday, “In the unlisted market right now, one NSE share trades at ₹1,992. Do the math, and the SBI Group’s NSE shareholding is worth roughly ₹37,000 crore.”
The company added that the NSE shares alone are worth almost half a year’s profit for the SBI, “sitting quietly on the balance sheet at near-zero original cost”.
In its earnings call on 8 May, SBI chairman C.S. Shetty said once the NSE gets listed, the bank balance sheet will be able to record the current market value of its NSE shares, which now sit at its old value. “…the whole shareholding by the SBI will be available as reserve to us to mark to market. Currently, it is not marked to market in our books.”
Responding to an analyst’s question in the call, Shetty added, “We have embarked on listing SBI AMC and hopefully in this financial year we will be able to complete, which will result in capital augmentation (CET-1).”
“That’s what I think gives us confidence that going forward two things, which are required for supporting credit growth, in terms of capital, we are fully convinced that we have the capability. Even with the current position we can fund almost 12 trillion credit growth. Further augmentation will help us going forward with enough liquidity in the system,” he added.
The bank’s current Common Equity Tier 1 (CET 1) ratio as of the fourth quarter of fiscal 2026 is 12.29. The CET- 1 ratio compares a bank’s core capital to its risk-weighted assets and is a measure of its strength and ability to absorb losses during periods of a downturn.
Overall, the SBI Group has reserves of Rs 5.95 lakh-crore as of the fourth quarter of fiscal 2026. The bank’s standalone reserves stand at Rs 5.43 lakh-crore.
In fiscal 2026, the bank said it posted its highest-ever annual net profit of Rs 80,032 crore.
Also Read: Karnataka govt looks to resolve stalemate with SBI, PNB to avert ‘impact on markets’
SBI’s NSE holdings
Overall, Public Sector Units (PSUs) own about a third of NSE, with the LIC being the single-largest shareholder.
According to the NSE’s statement about its shareholding pattern as of March 2026, the SBI owns 7.98 crore shares of the NSE, which amounts to 3.23 percent. SBI Capital Markets owns 10.72 crore shares of NSE, amounting to 4.33 percent. Together, the SBI Group owns 7.56 percent in NSE.
As per data from Unlisted Zone, at the current unlisted price of about Rs 2,000 per share, SBI’s holding is valued at Rs 15,969 crore. Paliwal said, the NSE IPO price is being estimated at Rs 1,500 per share, based on which the value of the same holding would be Rs 11,977 crore.
The SBI Group’s total holding, along with that of SBI Capital Markets, at the estimated IPO price, could be about Rs 28,065 crore.
“This is a significant latent asset on the group’s books that has never been fully price-discovered in public markets. The NSE listing will, for the first time, put a transparent market value on these holdings,” Paliwal said.
The NSE has said that it will take the Offer For Sale (OFS) route, which means no fresh shares will be issued, but existing shareholders will offload some of their stake.
SEBI rules dictate that companies exceeding a market capitalisation of Rs 5 trillion have to make a public offer of at least Rs 15,000 crore. The draft prospectus is expected by June, and the NSE is likely to list by the end of this year.
“The bank would be keen on participating in the OFS. We have given our in-principal consent to them. What kind of participation will happen, the board will determine,” SBI Chairman Shetty said on the earnings call.
Unlocking value through its subsidiary
The SBI has 14 subsidiaries, excluding SBI Foundation, such as SBI Ventures, SBI Cards and Payment Services, SBI Life Insurance, SBI General Insurance and so on. Most are not publicly listed.
In its latest investor presentation with the fourth-quarter results, the SBI said that SBI Funds Management has been the largest player in the market since the fourth quarter of fiscal 2019-2020 and as of March 2026, it had quarterly average Assets Under Management of Rs 12.48 lakh crore with a market share of 15.31 percent.
The SBI Funds Management IPO has also been structured as an OFS. The SBI owns 126 crore equity shares of SBI Funds Management, amounting to a 61.76 percent stake. The other major shareholder is Amundi India Holding, which owns 74 crore equity shares of the asset management company, amounting to a 36.26 percent stake.
The SBI is expected to sell up to 12.83 crore shares, 6.3 percent of the total shares, while the France-based Amundi will sell up to 7.53 crore shares, which amounts to 3.7 percent of the total shares in the Rs 13,000-crore IPO.
“At the likely valuation of around ₹1.2 lakh crore, SBI alone could raise close to ₹7,500 crore in cash, with the rest of its stake getting marked higher on the books,” AIM Investments said in its post on X.
Unlisted Zone pegs this figure at Rs 7,698 crore – at Rs 600 per share, which it says is estimated to be the IPO band price.
The company has not announced the price band of the IPO yet.
SBI’s entire stake in SBI Fund Management could be valued at Rs 75,600 crore at an estimated listing price of Rs 600 a share, Paliwal said.
“Since SBI’s cost of holding in SBI Funds Management is historically very low (it has been a promoter since inception), the one-time P&L gain from the OFS could be close to the full Rs 7,698 crore figure. Post-listing, its residual ~55% stake would also get marked to market —reflecting a significant boost to the group’s investment portfolio valuation,” he added.
Fuelling growth
Experts say, the closest comparable to what is happening now at the SBI was in 2020 when the bank’s subsidiary, SBI Cards and Payment Services, went public. SBI was the majority promoter with about 74 percent stake in the firm and divested about four percent in the OFS.
The Carlyle Group, which owned the rest, had sold about 10 percent. The stock had a tepid debut amid the pandemic, but mark-to-market, the SBI’s stake in SBI cards is worth more than Rs 40,700 crore.
If the NSE IPO as well as the SBI Funds Management IPO materialise this year, the assets unlocked, it will have the potential to unlock an unprecedented amount of capital for the SBI to grow.
In the 8 May earnings call, SBI Chairman Shetty said that the normal growth rate of the bank itself is taking care of adding scale. The bank is adding Rs 11 lakh-crore worth of business every year on top of Rs 109 lakh-crore of business, he said.
“So, we want to use this capital efficiently where it is required and efficiently in terms of giving the return to the investors, shareholders,” the chairman said.
He added that the bank is looking at further growth by increasing its market share in every district. “There are districts where SBI has a market share of 60 percent, but our guidance is that…whether you have 10 percent market share in a district or 60 percent, in every district we would like to grow by 1 percent.”
(Edited by Ajeet Tiwari)
Also Read: 22,217 electoral bonds bought from April 2019 to 15 February 2024 — SBI’s compliance affidavit in SC