SBI Funds shares rise 5% as Antique initiates coverage with Buy; 24% upside seen

SBI Funds Management Ltd shares rose 5% in Monday's trade after Antique Stock Broking initiated coverage on the asset management company (AMC) with a 'Buy' rating and a target price of Rs 620 apiece, implying a 24% potential upside. Large scale, distribution network and scope to improve active equity fund flows are seen as key growth drivers for SBI Funds.

"We believe a sustained recovery in active-equity flows remains the key catalyst for the rerating of the stock. Our FY27-29 operating Ebitda are 3-7% lower vs consensus. We initiate coverage on SBIFUNDS with a BUY rating and target price of Rs 620. Key risks: equity market volatility; sustained scheme underperformance," Antique Stock Broking said.

The domestic brokerage values SBI Funds at 30 times estimated H1FY29 earnings per share, in-line with its target multiple for HDFC AMC and 15 per cent discount to that of ICICI AMC and Nippon Life India Asset Management Ltd.

Following the development, SBI Funds Management shares touched a high of Rs 522.50, up 4.50% from the previous close of Rs 500, after opening at Rs 500. The stock was at Rs 517.85.

SBI Funds Management is India's largest mutual fund manager, with quarterly average assets under management (QAAUM) of Rs 12.6 lakh crore and a 15.1 per cent market share as of June 2026. It also has a strong presence in passive funds, which account for around 32% of its assets under management (AUM), with a 27.4% market share in the segment.

SBI Funds Management: Key triggers

Antique said State Bank of India's extensive distribution network gives SBI Funds Management a strong presence in smaller cities, classified as B-30 locations. Around 65% of the company's systematic investment plan (SIP) flows originate from these locations, reflecting the scope for deeper mutual fund penetration. The brokerage noted that SBI's bank accounts account for 20% of the mutual fund industry's monthly average AUM sourced through banks, while the asset manager's mutual fund QAAUM is equivalent to only 20.9% of SBI's deposit base.

The brokerage also sees opportunities in alternative investment funds and specialised investment funds (SIFs). SBI Funds Management's alternative investment fund QAAUM increased from Rs 3,400 crore in March 2024 to Rs 6,800 crore in June 2026. Its Magnum SIF platform, launched in October 2025, had captured around 14.6% of the emerging SIF category, with AUM of Rs 5,600 crore as of the second quarter of FY27.

Antique expects the company's equity mutual fund AUM, total mutual fund AUM, revenue and profit after tax to grow at compound annual growth rates of 16%, 12%, 14% and 13%, respectively, over FY26-FY29.

What to watch

Antique said a sustained recovery in active equity fund flows would be a key catalyst for a potential re-rating of SBI Funds Management shares. It noted that less than 46% of the company's equity AUM ranked in the top two performance quartiles over three years as of July 2026, compared with more than 72% for HDFC Asset Management Company and more than 50% for ICICI Prudential Asset Management Company.

The brokerage said the company's active equity and hybrid fund flow market share had improved from high single digits in FY26 to low double digits in FY27 so far, although it remained slightly below its overall market share. Antique valued the stock at 30 times its estimated price-to-earnings ratio for the first half of FY29 to arrive at its Rs 620 target price. It flagged equity market volatility and sustained underperformance of its schemes as key risks.