SBI Funds Management has initiated a postal ballot process to seek shareholder approval for the ratification of its Employees' Stock Option Plan 2018 (ESOP 2018) and the extension of its benefits to employees of present and future subsidiaries. This move is mandatory under Regulation 12(1) of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, following the company's initial public offer listing on July 21, 2026. Shareholders must cast their votes electronically between August 8, 2026, and September 6, 2026.

The postal ballot also seeks approval for four other key resolutions: the appointment of M/s. N L Bhatia & Associates as the secretarial auditor for five financial years; the adoption of amended Articles of Association to incorporate special rights for certain shareholders pursuant to a waiver cum amendment agreement; and the grant of special rights under a governance agreement dated March 19, 2026. These special rights pertain to board nomination rights, committee composition, and information rights for State Bank of India (SBI) and Amundi India Holding (AIH).

Voting Details

Eligible shareholders are those whose names appear in the Register of Members or Register of Beneficial Owners as received from the depositories on the cut-off date of Monday, August 03, 2026. The company has engaged Central Depository Services (India) Limited (CDSL) to provide the remote e-voting facility. The voting module will be disabled after the conclusion of the e-voting period.

ESOP 2018 Ratification

The ESOP 2018 was originally approved by the Board on January 20, 2018, and by shareholders on January 31, 2018. It was last amended in February 2023 to align with SEBI regulations. As of June 30, 2026, the maximum aggregate number of options yet to be offered or granted under the plan is 92,14,080, including expired or lapsed options. The scheme aims to align employee compensation with long-term organizational performance and shareholder value creation. Options vest over periods of three, four, or five years from the grant date and are exercisable within six years from the date of first vesting.

Secretarial Auditor Appointment

Shareholders are asked to approve the appointment of M/s. N L Bhatia & Associates as the secretarial auditor for a term of five consecutive financial years, from FY2027 to FY2031. The proposed remuneration for FY2027 is ₹ 3 lakhs plus applicable taxes and reimbursement of out-of-pocket expenses. The firm has served as the secretarial auditor since FY2022.

Special Rights and Governance

The ballot includes resolutions to adopt amended Articles of Association to incorporate special rights for SBI and AIH as per the waiver cum amendment agreement dated March 19, 2026, and the governance agreement of the same date. These rights include specific board nomination rights, appointment processes for key executives, and consultation rights regarding internal controls and compliance heads. Under Regulation 31B of the SEBI Listing Regulations, these special rights require shareholder approval via special resolution once every five years.

What the Numbers Show

The ratification of the ESOP 2018 is a procedural necessity post-IPO rather than a new dilutive event, as no new options have been granted since the listing. The pool of 92,14,080 options represents the remaining unallocated balance from the pre-listing era. The extension of benefits to subsidiary employees broadens the retention tool's scope without increasing the total option cap, suggesting management's intent to align incentives across the group structure while adhering to strict regulatory compliance frameworks established by SEBI.

SBI Funds Management Limited reported a standalone net profit of ₹8,728 million for the quarter ended June 30, 2026 (Q1FY27), marking a 3% year-on-year increase from ₹8,450 million in the corresponding period of the previous year. The asset manager’s quarterly average assets under management (QAAUM) reached ₹12.6 trillion, an 11% growth driven by strong inflows in passive funds and systematic investment plans (SIPs). This performance underscores the company's ability to sustain profitability amidst market volatility, benefiting shareholders through stable earnings growth despite a significant decline in non-operating income.

On August 03, 2026, the Board of Directors approved these unaudited financial results alongside strategic initiatives. These include a ₹25 crore investment in its wholly owned subsidiary, SBI Funds International (IFSC) Limited, and amendments to its Articles of Association to grant special rights to State Bank of India (SBI) and Amundi India Holding (AIH). The statutory auditors, Kirtane & Pandit LLP, issued a limited review report on the results in compliance with Regulation 33 of the SEBI Listing Regulations. The trading window for designated persons remains closed until August 05, 2026.

Financial Performance

Standalone net profit after tax stood at ₹8,728 million compared to ₹8,450 million in Q1FY26. Consolidated net profit was ₹8,803 million. Revenue from operations for the standalone entity was ₹11,487 million, up from ₹9,974 million year-on-year. Other income dropped significantly to ₹2,363 million from ₹3,274 million. Total expenses were ₹2,419 million, with employee benefit expenses remaining stable at ₹1,043 million.

Operational Highlights

SBI Funds Management’s total MF QAAUM stood at ₹12,609 billion, maintaining its position as the industry leader with a 15.1% market share. Passive QAAUM grew 12% year-on-year to ₹4,032 billion, capturing a 27.4% market share in the passive segment. Actively managed equity QAAUM reached ₹5,898 billion. SIP AUM hit ₹2.0 trillion, up 15% year-on-year, with 17 million triggered monthly transactions. The unique customer count rose 12% to 18.2 million, and total live folios increased 14% to 22 million. Digital platforms processed nearly 13 lakh transactions monthly, with 94% of investor transactions routed digitally.

Governance and Strategic Approvals

The Board appointed M/s. N. L. Bhatia & Associates as Secretarial Auditor for five consecutive years, from FY2027 to FY2031, subject to shareholder approval via postal ballot. Shareholders will also vote on the ratification of the Employees' Stock Option Plan 2018 and its extension to subsidiary employees. Additionally, the Board approved amended Articles of Association to grant special rights to SBI and AIH, including board nomination privileges and joint placement rights for matters concerning annual financial plans and debt availing exceeding 10% of net asset value. These changes stem from a Waiver Cum Amendment Agreement dated March 19, 2026.

What the Numbers Show

While revenue growth remained robust at 15%, the sharp decline in other income indicates that profit growth is increasingly driven by core operational revenues rather than non-operating gains. The operating margin excluding passives improved to 0.39% from 0.37% in the previous quarter, signaling enhanced efficiency in active fund management. The faster growth in passive AUM (12% YoY) compared to active equity AUM (10% YoY) underscores a continued shift towards low-cost investment options among investors, aligning with broader market trends favoring index-based products.