Lenskart IPO: Closes Day 1 Slightly Above Issue Price

Lenskart Stock Performance Following IPO

Following its initial public offering (IPO), Lenskart shares experienced a fluctuating start before ultimately closing marginally above the offer price on Monday. The ₹72.8 billion ($821 million) IPO, which was rapidly fully subscribed, nonetheless prompted discussion regarding the company’s valuation.

Initial Trading and Valuation

The stock commenced trading at ₹395, falling below the IPO price of ₹402. During the trading session, it experienced a decline of up to 11%, reaching ₹356.10, before recovering to conclude at ₹404.55. This closing price established Lenskart’s value at approximately ₹702 billion, equivalent to around $8 billion.

The IPO garnered substantial interest, with bids exceeding the available shares by roughly 28 times, largely driven by institutional investors.

Competitive Landscape and Business Model

Lenskart presents itself to investors as a company poised to outperform traditional optical retailers and online competitors through its vertically integrated business model. This model encompasses control over all aspects, from manufacturing processes to the operation of retail locations.

However, the 15-year-old company encounters competition across various price segments, ranging from established players like Titan Eye+ to emerging direct-to-consumer brands. This raises questions about the speed at which Lenskart can achieve profitable scaling both within India and internationally.

Financial Performance

The company reported profitability for the fiscal year 2025, concluding in March, with revenue increasing by 23% year-over-year to ₹66.53 billion (approximately $750 million). Net profit reached ₹2.97 billion (around $33 million), benefiting from a ₹1.67 billion ($19 million) accounting gain related to the acquisition of Owndays.

Excluding this non-cash item, the company’s underlying profit amounted to ₹1.30 billion, or roughly $15 million.

IPO Valuation and Investor Perspectives

At the upper end of the IPO price range, Lenskart sought a valuation of ₹700 billion (around $7.9 billion). This places it among the most highly valued new-age consumer brands in India, comparable to companies like Honasa and BlueStone.

This valuation signifies a rise of over 60% from the approximately $5 billion valuation observed during a secondary share sale in June, involving investors such as Fidelity and Temasek. Fidelity subsequently increased its valuation of Lenskart by 12% to $5.6 billion in November.

The proposed valuation, representing approximately 230 times Lenskart’s core net profit and 10 times its revenue, sparked debate among retail investors and on social media platforms. DSP Asset Managers, an investor in the company, defended the deal, acknowledging its high cost but emphasizing the business’s strength and scalability.

Executive Commentary and Future Plans

Peyush Bansal, Lenskart’s chief executive and a prominent figure on “Shark Tank India,” stated that the IPO was “fairly priced,” citing positive feedback from institutional investors.

“Our primary goal in building Lenskart wasn’t valuation; it was to extend our reach to people across India, from major cities like Delhi to even the most remote towns,” he remarked at the IPO ceremony in Mumbai.

Lenskart intends to utilize the IPO proceeds to fund expansion initiatives, including the opening of new stores and the enhancement of its supply chain and retail infrastructure. Investments in technology and marketing are also planned, with a portion of the funds potentially allocated for acquisitions and general corporate purposes.

Shareholder Information

The IPO involved the sale of shares by existing investors, including SoftBank, Schroders Capital, Premji Invest, Kedaara Capital, and Alpha Wave Ventures. Furthermore, co-founders Peyush and Neha Bansal, Amit Chaudhary, and Sumeet Kapahi also sold portions of their holdings.

Broader IPO Trend in India

Lenskart’s listing occurs amidst a growing trend of Indian startups pursuing public markets, driven by tightening late-stage venture funding and increasing domestic investor interest. Companies such as Groww, Pine Labs, PhysicsWallah, Capillary Technologies, and BoAt are currently preparing for their respective IPOs in India.