Lenskart IPO Sees Strong Investor Demand on Day 1, Amid Valuation Debate

Lenskart Solutions launched its Initial Public Offering (IPO) on Friday, aiming to raise ₹7,278.02 crore. The issue comprises a fresh issuance of shares worth ₹2,150 crore and an Offer for Sale (OFS) component of ₹5,128 crore.

On the first day of subscription, by 2 PM, the IPO received bids for 6.19 crore shares against the total issue size of 9.97 crore shares, indicating healthy investor interest. Retail investors fully subscribed their allocated portion (1x), while Qualified Institutional Buyers (QIBs) and Non-Institutional Investors also showed participation (0.68x and 0.25x respectively).

Prior to the IPO opening, Lenskart successfully raised ₹3,268 crore from 147 anchor investors, signaling confidence from institutional players.

The IPO will remain open for subscriptions until November 4. Allotment is expected by November 6, with the company set to list on stock exchanges on November 10.

**Valuation Debate**: A key point of discussion is Lenskart's high valuation, which stands at approximately 235-238 times its projected FY25 earnings, based on the upper price band of ₹402 per share. CEO Peyush Bansal defended this valuation, highlighting the company's strong performance, growth prospects, and commitment to creating shareholder value, stating that market determines valuation and that investors have conducted thorough due diligence.

**Company Background**: Founded in 2010, Lenskart is a leading omnichannel eyewear retailer in India, known for integrating its online presence with a growing network of physical stores. It operates over 2,100 stores in India and hundreds internationally. The company has introduced innovative services like virtual try-ons and home eye tests.

**Financials**: Lenskart has shown impressive financial turnaround. For FY25, it reported a net profit of ₹297 crore, a significant improvement from a ₹10 crore loss in FY24. Revenue grew by 22% year-on-year to ₹6,625 crore, driven by domestic demand and international expansion.

Impact This IPO is significant as it represents one of the largest retail IPOs in India, drawing substantial investor capital. The strong initial subscription and anchor book indicate investor appetite for well-established consumer brands. The high valuation, however, introduces a risk factor, and future stock performance will depend on the company's ability to sustain its growth trajectory and profitability. The successful listing could boost sentiment for other upcoming IPOs in the consumer sector. Rating: 8/10.

Difficult Terms Explained **IPO (Initial Public Offering)**: The process by which a private company offers its shares to the public for the first time, becoming a publicly traded company. **Anchor Investors**: Large institutional investors (like mutual funds, foreign portfolio investors) who invest in an IPO before it opens to the general public, providing stability and signaling confidence. **Retail Investors**: Individual investors who invest smaller amounts in the stock market. **Qualified Institutional Buyers (QIBs)**: Large financial institutions like banks, mutual funds, pension funds, and insurance companies. **Non-Institutional Investors (NIIs)**: Investors who are not Qualified Institutional Buyers and invest above the retail investor limit (e.g., high net-worth individuals, corporate bodies). **Offer for Sale (OFS)**: A type of IPO where existing shareholders (promoters, early investors) sell their shares to the public, rather than the company issuing new shares. **Valuation**: The estimated worth of a company, often expressed as a multiple of its earnings, revenue, or assets. **FY25 (Fiscal Year 2025)**: Refers to the financial year that typically ends on March 31, 2025. **Book-Running Lead Managers**: Investment banks that manage the IPO process, advise the company, and help market the issue to investors.