SBI Mutual Fund At ₹2,600: Why You Should Not Buy

What's the story?

ICICI Prudential AMC is going public in December at a valuation between ₹1.07-1.11 lakh crore. This gives us a perfect benchmark to value SBI Mutual Fund—India's largest AMC.

The problem: SBI MF is trading at ₹2,600 in the unlisted market. That's way too expensive.

A) The ICICI benchmark

ICICI Prudential AMC IPO (December 2025):

• Valuation: ₹1.07-1.11 lakh crore
  
  
• AUM: ₹11.16 lakh crore (October 2025)
  
  
• PAT: ₹2,651 crore (FY2025)
  
  
• Mcap/AUM: 9.58% to 9.95%
  
  
• P/E Ratio: 40.4x to 41.9x

This sets the benchmark for valuing Indian AMCs.

B) SBI Mutual Fund: The numbers

October 2025:

• AUM: ₹12.60 lakh crore (12.9% larger than ICICI)
  
  
• Revenue: ₹4,063 crore
  
  
• PAT: ₹2,540 crore
  
  
• Net Margin: 62.52% (vs ICICI's 53.3%)
  
  
• 4-year PAT CAGR: 33%

SBI is bigger, more profitable, and growing faster than ICICI.

C) What should SBI MF be worth?

Method 1: Mcap/AUM Ratio (9.58-9.95% range)

• Conservative (8.5%): ₹1.07 lakh crore
  
  
• Base case (9.5%): ₹1.20 lakh crore
  
  
• Optimistic (10%): ₹1.26 lakh crore

Method 2: P/E Ratio (40.4-41.9x range)

• Conservative (38x): ₹96,520 crore
  
  
• Base case (40x): ₹1,01,600 crore
  
  
• Optimistic (42x): ₹1,06,680 crore

Fair valuation: ₹97,000 crore to ₹1.26 lakh crore

Number of shares: 50.8 crore

Fair value per share: ₹1,909 to ₹2,480

Realistic IPO price: ₹2,000-₹2,300

D) At ₹2,600, here's what you're paying

• Implied market cap: ₹1.32 lakh crore
  
  
• Mcap/AUM: 10.48% (higher than ICICI's 9.58-9.95%)
  
  
• P/E: 52x (vs ICICI's 40.4-41.9x)

You're paying a premium for an unlisted, illiquid asset with no confirmed IPO date.

E) Why ₹2,600 doesn't work

The listing gain is already priced in

1. Expected IPO price: ₹2,000-₹2,300

2. Typical listing pop: 10-20%

3. Post-listing: ₹2,200-₹2,760

At ₹2,600, the upside is already baked in.

The returns are terrible

Buy at ₹2,600 today. IPO at ₹2,200 in 18 months. Even with 20% listing gain (₹2,640), your return is 1.5%. That's 1% annualized for high risk.

You're paying 24-29% more than ICICI on P/E

ICICI: 40.4-41.9x P/E (listing next month)

SBI: 52x P/E (unlisted, uncertain timeline)

For an unlisted share, you should get a discount, not pay a premium.

F) Three scenarios at ₹2,600

1. Best case (20% probability):

• IPO at ₹2,400, lists at ₹3,000
  
  
• Your gain: 15%
  
  
• Needs everything perfect

2. Base case (50% probability):

• IPO at ₹2,100-₹2,200, lists at ₹2,310-₹2,530
  
  
• Your gain: -11% to -3%
  
  
• You lose money or break even

3. Worst case (30% probability):

• IPO delayed/priced at ₹1,900-₹2,000
  
  
• Unlisted price corrects to ₹2,000-₹2,200
  
  
• Your loss: 15-23%

Plus 6-month post-IPO lock-in adds more risk.

G) What you should do

1. Wait for ICICI's IPO (mid-December)

Its listing performance will set AMC valuation expectations. If it disappoints, SBI unlisted will correct to ₹2,000-₹2,200.

2. Wait for price correction

After ICICI's price discovery, SBI's inflated pricing will adjust.

3. Wait for SBI's IPO announcement

No DRHP filed. Timeline uncertain. Why lock money at peak prices?

4. Buy other Listed AMC from market.

H) The pricing guide

The comparison

You're paying more for less.

I) Bottom line

SBI Mutual Fund is excellent. The IPO will likely happen. India's mutual fund story is strong.

But at ₹2,600:

• You're overpaying by 13-36%
  
  
• You're paying 52x P/E vs ICICI's 40.4-41.9x
  
  
• You're paying 10.48% of AUM vs ICICI's 9.58-9.95%
  
  
• You get illiquidity without any discount
  
  
• Minimal upside, significant downside

Don't buy at ₹2,600. Wait.

Wait for ICICI's IPO result, or for SBI unlisted to correct to ₹1,900-₹2,100, or for the actual IPO announcement.

In investing, patience is profitable.

Summary

SBI Mutual Fund's fair value: ₹1,909-₹2,480 per share. At ₹2,600, you're paying tomorrow's listing price today for an illiquid asset.

Sources: ICICI IPO - Moneycontrol | ICICI AUM - Angel One | SBI AUM - AMFI

Disclaimer: Educational analysis only. Not investment advice. Unlisted shares carry extreme risks. Consult a SEBI-registered advisor.