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All eyes on Lenskart’s muted listing: Adia-backed Indian eyewear retailer Lenskart Solutions made a muted debut on the BSE and NSE this past Monday, ending the day up 0.3% from its issue price of INR 402 after a day of choppy trading before going on to gain 2.6% by yesterday’s close. The INR 72.8 bn (USD 821 mn) listing is one of the nation’s largest so far this year.
What gives? Pundits like the company’s business model and fundamentals, but think investment bankers priced the offering too high. The offering was sharply oversubscribed, with investors placing bids for USD 13 bn worth of shares.
Lukewarm start: The listing valued Lenskart at USD 7.69 bn. The IPO included a fresh issue of USD 240 mn (30% of the offering) while 70% of the issuance was a secondary sale. Shareholders heading into the offering included Abu Dhabi Investment Authority (which acquired a 10% stake in 2023 for USD 500 mn), SoftBank, KKR, and Premji Invest, among others.
Blurry market vision: Despite clocking USD 33 mn in income and a 23% y-o-y revenue jump to USD 760 mn in FY 2025, the company’s valuation remains stretched, analysts told Reuters. Ambit Capital last week issued a sell rating for Lenskart, flagging valuation concerns, as it is at roughly 55x two-year forward operating income, which is about 20-30% higher than its peers Trent and Nykaa, per the Hindu Businessline.
Directing the narrative away from questions about valuation at the ringing of the bell, CEO Peyush Bansal said Lenskart was built to give India eyesight and “not to build a valuation,” The Economic Times reports. Amid a social media backlash over the pricing of the offering, he said the firm has been profitable for years.
USE OF PROCEEDS- Lenskart will use the fresh capital to expand its retail network, upgrade technology, and pursue acquisitions, among other purposes.
Advisors: The book running and lead managers for the listing were Kotak Mahindra Capital Company, Morgan Stanley India Company, Avendus Capital, Citigroup Global Markets India, Axis Capital, and Intensive Fiscal Services. Cyril Amarchand Mangaldas and Trilegal provided counsel on matters of domestic law while Sidley Austin provided international counsel.
