Shares of Lenskart Solutions will be listed on the bourses today. According to the grey market, the stock may open flat or negative.
Lenskart Solutions’ IPO closed on Tuesday with an overall subscription of 28.26 times. The eyewear retailer saw strong demand from QIBs at 40.35 times, NIIs at 18.23 times, and retail investors at 7.54 times.
The public offer had a fresh issue of shares worth Rs 2,150 crore and an OFS of 12.75 crore shares by promoters and investors. The Rs 7,278 crore IPO was priced at Rs 382-402 per share. Under the OFS, promoters—Peyush Bansal, Neha Bansal, Amit Chaudhary, and Sumeet Kapahi—along with investors SVF II Lightbulb (Cayman) Ltd, Schroders Capital Private Equity Asia Mauritius Ltd, PI Opportunities Fund II, Macritchie Investments Pte. Ltd., Kedaara Capital Fund II LLP, and Alpha Wave Ventures LP, offloaded shares.
Lenskart earlier raised Rs 3,268.36 crore from anchor investors. Among the investors in the anchor book were domestic mutual funds such as SBI Mutual Fund, HDFC Mutual Fund, ICICI Prudential, Kotak Mutual Fund, Axis Mutual Fund, Aditya Birla Sun Life, Government Pension Fund Global, Steadview Capital, Goldman Sachs, JPMorgan and HSBC.
Expansion plans
It proposes to use the proceeds for strategic initiatives, including capital expenditure to set up company-operated, company-owned stores in India, and payments under lease, rent, and licence agreements for these stores.
Valuation worries
Meanwhile, Ambit Capital initiated coverage of Lenskart with a sell rating ahead of the listing, flagging valuation concerns even as the eyewear retailer continues to deliver strong revenue growth and expand its domestic and global footprint. The brokerage flagged a sharp disconnect between the company’s growth prospects and its return ratios. Ambit said its target price of Rs 337 implies EV/EBITDA multiples of 45x and 22x for the India and international businesses, respectively.
Earlier, SBI Mutual Fund had invested Rs 100 crore in an eyewear retailer at an enterprise valuation of around $7.7 billion (approximately Rs 70,000 crore), marking one of the largest pre-IPO investments by a domestic institutional investor in a new-age consumer company. The transaction was executed through SBI Mutual Fund’s Alternative Investment Funds — SBI Optimal Equity Fund and SBI Emergent Fund — at a share transfer price of Rs 402 per share, according to regulatory filings.