SBI Funds Management IPO: Who Is Eligible Under The Shareholder Quota?

SBI Funds Management’s IPO is now open and has evoked good response from investors, especially existing shareholders of the State Bank of India (SBI). In addition to retail investors, eligible SBI shareholders will also have the chance to apply through a special shareholder reservation, giving them another chance to participate in one of the biggest IPOs of the year.

The ₹9,813 crore public issue is an offer for sale (OFS) by State Bank of India and Amundi India Holding. The IPO will be open for subscription from July 14 to July 16 and the shares are proposed to be listed on the stock exchanges on July 21.

Who Is Eligible To Apply Under The SBI Shareholder Category?

The shareholder reservation category in SBI Funds Management has set aside up to 1.3 crore equity shares for eligible SBI shareholders. But this reservation does not apply to all SBI customers or mutual fund investors. The quota shall be available only to eligible equity shareholders of State Bank of India who were holding shares of SBI as on the date specified in the Red Herring Prospectus (RHP).

To apply in this category, investors should have owned SBI shares as of or before the eligibility date and should have a valid PAN linked to their shareholding records. They should also have a valid demat account, as the IPO shares are allotted only in electronic form.

Importantly, there is no discount to price for shareholders applying under this reserved category. The maximum application value in the shareholder reservation component continues to be Rs 2 lakh, the same as the retail investment limit.

How Does The Shareholder Quota Function?

SBI shareholders who are eligible can apply in the shareholder reservation category as well as in the retail individual investor category, where both applications are made as per the applicable rules. This effectively gives eligible investors two chances to get an allotment, though allotment in either category is not assured and is dependent on the subscription levels.

Investors should also note that the shareholder reservation is not available to SBI bank customers or investors in SBI Mutual Fund schemes. The benefit will only be available to those who held eligible SBI equity shares as per record date mentioned in the IPO documents.

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