Lenskart experienced a rollercoaster IPO debut on Monday, initially dipping before ultimately concluding slightly above its IPO price, indicating significant investor enthusiasm amidst market fluctuations. The Indian eyewear powerhouse garnered ₹72.8 billion ($821 million) from a listing that was oversubscribed in mere hours, igniting debates about its high market valuation.
Opening at ₹395—below its IPO price of ₹402—the stock plummeted by as much as 11% to ₹356.10 at one point. However, by the end of the trading day, it had soared back to ₹404.55, bringing the company's valuation to approximately ₹702 billion ($8 billion). The IPO saw remarkable demand, being oversubscribed nearly 28 times, primarily influenced by institutional investors.
Founded 15 years ago, Lenskart highlights its vertically integrated business model, managing everything from production to retail directly. The company asserts that this strategy gives them a competitive edge against traditional optical chains and new online entrants. However, rising competition from brands like Titan Eye+ and the growing presence of direct-to-consumer companies raises concerns about the pace of its profitable expansion, both domestically and globally.
On the financial front, Lenskart reported profitability for FY25, ending March, with a revenue increase of 23% year-on-year to ₹66.53 billion ($750 million). The net profit was noted at ₹2.97 billion ($33 million), buoyed by a ₹1.67 billion ($19 million) accounting benefit related to its Owndays acquisition. Excluding this one-off gain, the core profit was around ₹1.30 billion ($15 million).
At the peak of its IPO range, Lenskart was aiming for a valuation of ₹700 billion ($7.9 billion), positioning itself as one of India's most valued new-age consumer brands alongside Honasa and BlueStone. This valuation reflects a 60% increase from last June’s secondary share sale involving late-stage investors such as Fidelity and Temasek, implying around 230 times the core net profit and a revenue multiple of 10, raising discussions among retail investors.
CEO Peyush Bansal underlined the company's mission instead of its valuation during the IPO event, stating, “We didn’t build Lenskart to reach a valuation. We did it to reach people, from Delhi to the smallest towns of India.”
The funds raised through this IPO will enable Lenskart to enhance its retail footprint, optimize supply chains, invest in technological advancements and marketing, and prepare for potential acquisitions. Existing backers such as SoftBank, Schroders Capital, Premji Invest, Kedaara Capital, and Alpha Wave Ventures, alongside co-founders and executives, divested portions of their stakes as part of the listing.
Lenskart’s IPO comes at a time when numerous Indian startups are eyeing the public markets due to tightening late-stage venture funding and an increasing interest from domestic investors. Companies like Groww, Pine Labs, PhysicsWallah, Capillary Technologies, and BoAt are also gearing up for their public offerings in the near future.
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