Lenskart IPO: Eyewear retailer , has been buzzing in financial circles and on social media for seeking as much as ₹70,000 crore in valuations.
Shark Tank judge -led Lenskart IPO is priced in the range of ₹382 to ₹402 per share, which values the company at ₹69,742 crore. The IPO is a mix of fresh share sale of ₹2,150 crore and an offer for sale of 127.6 million shares.
At ₹402 per share, the valuation implies a steep 260x earnings multiple, which is steep for a company that turned profitable just a year ago, and most of its profits are powered by accounting changes. This also makes Lenskart one of the most expensive listings in India’s digital retail space.
Why are analysts worried about Lenskart valuations?
A major argument for the supporters of the company is its strong revenue growth and swing to profitability. However, Lenskart’s reported net profit of ₹297 crore in FY25 includes a ₹167.2 crore non-cash gain related to the Owndays acquisition.
Excluding this one-time item, the normalised profit declines to ₹130.1 crore, resulting in a modest 1.96% net margin, compared to the reported 4.24%.
“Despite its large scale, Lenskart’s profitability remains weak. A normalised 1.96% net margin on over ₹6,650 crore in revenue is concerning, especially when several smaller peers deliver stronger profitability. The ₹69,726 crore valuation appears difficult to justify against a ₹130 crore normalised profit, implying that much of the optimism is already priced in,” said Abhinav Tiwari, Research Analyst at Bonanza.
Moreover, Tiwari said that by not adjusting for one-time gains, investors are presented with an artificially inflated profit, making the valuation appear less expensive than it truly is.
Analysts said that valuation reflects strong expectations of future growth and margin expansion rather than current earnings.
Brokerage Swastika, in its IPO report, noted that the current valuations at a PE of over 200 times are “extremely demanding with minimal margin for error”. Therefore, despite solid business fundamentals, it assigned a ‘neutral’ rating to the IPO.
Revenues rising sharply in FY24 and losses narrowing, the company’s omni-channel strategy, private-label dominance, and global expansion give it credible growth levers, said Harshal Dasani, Business Head at INVAsset PM. However, sustaining 30–40% revenue growth while expanding margins in a competitive eyewear market will be critical to support such rich pricing, he added.
The Indian eyewear market is projected to expand at approximately 13% CAGR, reaching ₹1,483 billion ($17.2 billion) by the Financial Year 2030. Moreover, in India, 70% of prescription eyeglasses are still sold through unorganised channels as of the Financial Year 2025. And the market demand for the same remains low as compared to other developed countries.
As per Religare Broking, a fair P/E range of 40-60x would be more justified at the present financials.
Beyond valuation concerns, additional risks remain, like promoters are selling Rs. 1,100 cr worth of shares through the OFS, suggesting limited near-term confidence and an opportunity to monetise holdings at elevated valuations, said Tiwari.
In July, founder and CEO Peyush Bansal purchased 17 million Lenskart shares at ₹52 each, increasing his stake from 9.3% to 10.3%. This provided a valuation of around ₹8,741 crore to the company, which is less than eight times the current figure.
However, it must be noted that the company has strong investor backing, with the entry of veteran investor Radhakishan Damani. This, Swastika said, adds credibility and market confidence.
Irrespective of the discussions on Lenskart’s IPO valuations, the Street remains hooked to its IPO as it was booked over 1.1 times on the first day itself. In the unofficial grey market, the Lenskart IPO is trading at a premium of 24%.
Can Lenskart shares offer upside post listing?
Amid valuation concerns, however, analysts are unsure of more upside for the stock in the near term, unless profitability accelerates faster than expected.
“Over the medium term, investors betting on Lenskart are essentially backing its ability to evolve from a high-growth retailer into a cash-generating consumer brand with global scale. The company’s next phase will determine whether ₹70,000 crore marks a justified premium — or the upper bound of optimism,” said Dasani.
Market analyst Ajit Mishra, whose Religare Broking also has a ‘neutral’ call on the IPO, said that a correction after Lenskart IPO listing could be more lucrative for long-term investors.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.