SBI Funds Management's Rs 11,000 crore-plus IPO has drawn strong interest because of its scale, brand and valuation, but analysts said the offer-for-sale structure and the size of the issue could keep listing gains measured. The IPO is entirely an offer for sale of up to 20.37 crore shares by State Bank of India and Amundi India Holding.SBI is selling up to 12.83 crore shares, while Amundi India Holding is selling up to 7.54 crore shares. Since there is no fresh issue, SBI Funds Management will not receive any proceeds from the IPO.For investors, the question is whether the pricing leaves enough room for gains after listing. At the upper price band of Rs 574, the issue is valued at about 38.1 times FY26 earnings. Analysts said this is lower than some listed asset management peers and gives the IPO some valuation support.Swastika Investmart said SBI Funds Management is valued at 38.12 times FY26 earnings, below the industry average of 41.64 times. The brokerage said the company’s scale, margins and relative valuation comfort make it suitable for long-term investors.Also Read: SBI MF IPO vs ICICI AMC: Which is the better bet for investors ahead of Rs 11,600 crore issue?SBI Funds Management IPO GMPIn the unlisted market, the company's shares are commanding a decent premium of around 15% over the IPO price, indicating steady demand.SBI Funds IPO valuationSBI Funds Management is India’s largest asset manager, with quarterly average assets under management of Rs 12.5 lakh crore and a market share of about 15.3%. The company also has a strong SIP franchise and a wide distribution network backed by SBI and Amundi.Ventura Securities said the company’s key strengths include its leading market position, SBI brand, diversified product portfolio, large retail customer base, recurring fee income, wide distribution reach and access to Amundi’s global investment and technology capabilities.The AMC business is asset-light and fee-led. This makes profitability high when AUM grows. Arihant Capital said revenue rose from Rs 3,426 crore in FY24 to Rs 4,976 crore in FY26, while EBITDA stood at Rs 4,058 crore, implying margins of around 82%. Profit after tax rose to Rs 3,067 crore in FY26, up around 21% year-on-year.Arihant Capital said SBI Funds Management benefits from financialisation of savings, deeper SIP penetration and SBI-backed distribution. The brokerage recommended "subscribe for long term", while also noting that earnings remain exposed to market volatility and regulation around total expense ratios and distribution.How SBI Funds compares with listed AMC peersThe comparison with listed AMC stocks is central to the IPO. SBI Funds Management is larger than listed peers in assets and has one of the strongest bank-led distribution networks in the country. Its return ratios are also strong.Feroze Azeez, Joint CEO of Anand Rathi Wealth, said SBI Funds Management had an EBITDA margin of 92%, PAT margin of 61.7% and ROE of 43% in FY26, which is among the strongest in the listed peer set.He said the IPO is being offered at around 38 times FY26 earnings, compared with higher valuations for peers such as ICICI Prudential AMC and Nippon India AMC. “Despite SBI MF being the industry’s largest and one of its most profitable players, it has been relatively moderate compared with peers,” Azeez said.One reason for this is SBI Funds Management’s product mix. The company has a large share of passive products such as ETFs. These products bring scale but earn lower management fees than active equity funds. That can affect revenue growth compared with peers that have a larger active equity mix.This is also why investors may not judge the IPO only on AUM size. The business is large, profitable and trusted, but the fee mix will matter over time.Offer for sale and listing gain outlookThe 100% OFS structure is the main concern for investors looking for strong listing gains. The company is not raising growth capital. Existing shareholders are selling part of their stake. Analysts say that does not hurt the operating business because AMCs do not need heavy capital for expansion. But it can affect sentiment among investors who prefer IPOs where fresh money is used to fund growth.The large issue size may also reduce the chance of a very sharp listing pop. Big, mature financial services IPOs often attract institutional demand but may not deliver the kind of listing gains seen in smaller, high-growth offers.Swastika said earnings will remain linked to AUM growth and market performance. That is important because AMC profits depend heavily on market levels, fund flows and asset mix. A correction in equity markets can affect AUM and fee income.Still, analysts see valuation support. SBI Funds Management is coming at a lower multiple than some listed peers, while offering stronger scale and return ratios. This may help the stock list with gains if market sentiment remains favourable.Azeez said investors may also consider diversified equity mutual funds instead of taking concentrated exposure to one IPO. Such funds can invest across listed companies, including IPOs, if they fit the fund mandate.For investors willing to hold beyond listing day, SBI Funds Management offers a strong franchise at a reasonable valuation. For those entering only for listing gains, expectations may need to be realistic.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)