Lenskart’s Rs 7,278 crore IPO, comprising a Rs 600 crore recent problem and a Rs 6,678 crore supply on the market, was subscribed an honest 28 instances total, drawing bids price almost Rs 1 lakh crore. The sturdy response was pushed by institutional traders, with the QIB portion subscribed 45 instances, whereas retail and HNI classes have been additionally absolutely booked.
Nonetheless, the Road has grown cautious over valuation considerations, an element which will now be weighing on sentiment. On the higher finish of the worth band of Rs 402 per share, the IPO valued Lenskart at a steep FY25 EV/EBITDA a number of of over 50x, far greater than established listed friends within the shopper and retail house.
Including to the stress, brokerage Ambit Capital initiated protection with a “Promote” score simply earlier than the itemizing, citing stretched valuations and modest return ratios.
“We anticipate Lenskart to ship 20% income CAGR over FY25–28 led by India enlargement and rising world scale. Nonetheless, at 55x FY28 EV/EBITDA, the inventory trades at a 15–30% premium to Trent and Nykaa regardless of a decrease RoCE of 9% versus friends’ 35–40%,” Ambit mentioned. It set a goal worth of Rs 337, indicating a draw back of about 16% from the difficulty worth.
Whereas the corporate has delivered sturdy topline progress, revenues rose 32.5% to Rs 6,653 crore in FY25, a bit of its Rs 297 crore FY25 revenue got here from a one-time acquire of Rs 167 crore linked to the Owndays acquisition. Adjusted for this, the normalized revenue drops to Rs 130 crore, translating to a internet margin of simply 1.96%.Analysts say that whereas Lenskart’s long-term story stays compelling, pushed by its management in India’s underpenetrated eyewear market and omnichannel technique, the inventory’s short-term outlook seems muted.
If the inventory lists flat, it could mirror a cooling of sentiment that had pushed gray market trades to frothy ranges earlier. Lengthy-term traders, nevertheless, should look to carry, given the corporate’s structural progress potential in India’s increasing eyewear and optical retail market.
