Lenskart IPO Opens Soon: Grey Market Premium Softens Amidst Strong Investor Interest

Lenskart Solutions Ltd. is set to launch its Initial Public Offering (IPO), with shares currently trading at a 12% premium in the grey market, an unofficial market where shares trade before listing. While this premium indicates potential listing gains, it has fallen from ₹108 to ₹48 against the issue price of ₹402, suggesting a softening of investor sentiment. The IPO aims to raise up to ₹7,278.02 crore, potentially valuing the company at around ₹69,741 crore post-issue. The price band for the IPO is ₹382-₹402 per share, with a lot size of 37 shares, requiring a minimum investment of ₹14,874. The issue will open for public subscription from November 2 to November 4, with anchor investors bidding on November 1. Lenskart plans to raise ₹2,150 crore through a fresh issue, while existing investors, including SoftBank, Peyush Bansal, Kedaara Capital, and others, will sell shares via an Offer for Sale (OFS). Recent pre-IPO investments include ₹100 crore from SBI Mutual Fund and ₹90 crore from Radhakishan Damani. The company has shown strong financial performance, with over 30% annual revenue growth and over 90% EBITDA surge in the last three years. For FY25, Lenskart reported revenue of ₹6,652 crore and a profit of ₹297 crore. It operates over 2,100 stores globally.

Impact: This IPO is significant for the Indian primary market, reflecting investor appetite for consumer-focused companies with strong growth potential. A successful listing could boost confidence in the IPO market. The declining grey market premium, while still positive, warrants caution for investors regarding immediate listing gains. The company's performance and valuation will be closely watched. The IPO's success could influence future listings in the consumer retail and tech sectors.

Difficult Terms Explained: IPO (Initial Public Offering): The first time a private company offers its shares to the public to raise capital. Grey Market Premium (GMP): An unofficial indicator of demand for an IPO, reflecting the price at which shares trade in an unofficial market before listing. Listing Day: The first day a company's shares are traded on a stock exchange. Issue Price: The price at which shares are offered to the public during an IPO. OFS (Offer for Sale): A process where existing shareholders sell their shares to new investors, rather than the company issuing new shares. Anchor Investors: Large institutional investors who subscribe to a portion of the IPO before it opens to the public, usually signifying strong backing. EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization; a measure of a company's operating performance. Pre-IPO: Transactions or investments made before a company goes public through an IPO.