Lenskart IPO: Eyewear retailer ₹7,278 crore IPO, which opened and sailed via on Friday”>Lenskart Options’ ₹7,278 crore IPO, which opened and sailed via on Friday, has been buzzing in monetary circles and on social media for looking for as a lot as ₹70,000 crore in valuations.
Shark Tank decide Peyush Bansal-led Lenskart IPO is priced within the vary of ₹382 to ₹402 per share, which values the corporate at ₹69,742 crore. The IPO is a mixture of contemporary share sale of ₹2,150 crore and a suggestion on the market of 127.6 million shares.
At ₹402 per share, the valuation implies a steep 260x earnings a number of, which is steep for a corporation that turned worthwhile only a 12 months in the past, and most of its income are powered by accounting modifications. This additionally makes Lenskart some of the costly listings in India’s digital retail area.
Why are analysts fearful about Lenskart valuations?
A significant argument for the supporters of the corporate is its sturdy income progress and swing to profitability. Nevertheless, Lenskart’s reported internet revenue of ₹297 crore in FY25 features a ₹167.2 crore non-cash acquire associated to the Owndays acquisition.
Excluding this one-time merchandise, the normalised revenue declines to ₹130.1 crore, leading to a modest 1.96% internet margin, in comparison with the reported 4.24%.
“Regardless of its giant scale, Lenskart’s profitability stays weak. A normalised 1.96% internet margin on over ₹6,650 crore in income is regarding, particularly when a number of smaller friends ship stronger profitability. The ₹69,726 crore valuation seems tough to justify in opposition to a ₹130 crore normalised revenue, implying that a lot of the optimism is already priced in,” stated Abhinav Tiwari, Analysis Analyst at Bonanza.
Furthermore, Tiwari stated that by not adjusting for one-time good points, buyers are offered with an artificially inflated revenue, making the valuation seem cheaper than it actually is.
Analysts stated that Lenskart IPO valuation displays sturdy expectations of future progress and margin enlargement somewhat than present earnings.
Brokerage Swastika, in its IPO report, famous that the present valuations at a PE of over 200 occasions are “extraordinarily demanding with minimal margin for error”. Due to this fact, regardless of stable enterprise fundamentals, it assigned a ‘impartial’ ranking to the IPO.
Revenues rising sharply in FY24 and losses narrowing, the corporate’s omni-channel technique, private-label dominance, and international enlargement give it credible progress levers, stated Harshal Dasani, Enterprise Head at INVAsset PM. Nevertheless, sustaining 30–40% income progress whereas increasing margins in a aggressive eyewear market might be crucial to help such wealthy pricing, he added.
The Indian eyewear market is projected to develop at roughly 13% CAGR, reaching ₹1,483 billion ($17.2 billion) by the Monetary Yr 2030. Furthermore, in India, 70% of prescription eyeglasses are nonetheless bought via unorganised channels as of the Monetary Yr 2025. And the market demand for a similar stays low as in comparison with different developed nations.
As per Religare Broking, a good P/E vary of 40-60x could be extra justified at the moment financials.
Past valuation issues, extra dangers stay, like promoters are promoting Rs. 1,100 cr value of shares via the OFS, suggesting restricted near-term confidence and a possibility to monetise holdings at elevated valuations, stated Tiwari.
In July, founder and CEO Peyush Bansal bought 17 million Lenskart shares at ₹52 every, growing his stake from 9.3% to 10.3%. Nevertheless, he’s now offloading 20.4 million shares.
All stated, it should be famous that the corporate has sturdy investor backing, with the entry of veteran investor Radhakishan Damani. This, Swastika stated, provides credibility and market confidence.
Regardless of the discussions on Lenskart’s IPO valuations, the Road stays hooked to its IPO because it was booked over 1.1 occasions on the primary day itself. Within the unofficial gray market, the Lenskart IPO is buying and selling at a premium of 24%.
Can Lenskart shares provide upside put up itemizing?
Whereas valuation issues linger, analysts are not sure of extra upside for the inventory within the close to time period, except profitability accelerates sooner than anticipated.
“Over the medium time period, buyers betting on Lenskart are primarily backing its potential to evolve from a high-growth retailer right into a cash-generating shopper model with international scale. The corporate’s subsequent part will decide whether or not ₹70,000 crore marks a justified premium — or the higher certain of optimism,” stated Dasani.
Market analyst Ajit Mishra, whose Religare Broking additionally has a ‘impartial’ name on the IPO, stated {that a} correction after Lenskart IPO itemizing might be extra profitable for long-term buyers.
Disclaimer: This story is for academic functions solely. The views and suggestions expressed are these of particular person analysts or broking corporations, not Mint. We advise buyers to seek the advice of with licensed specialists earlier than making any funding selections, as market situations can change quickly and circumstances could range.
