The Initial Public Offering (IPO) of Lenskart Solutions, a major eyewear retailer, has sparked intense debate in the primary market. While the company commands a strong brand and dominates the organized Indian eyewear sector, its valuation is considered extremely stretched by many analysts.
The article – “Analyzing Lenskart’s Future Listing and Long-Term Fate” is not an investment advice. This is an attempt to educate you and give you thinking dimensions for making long term investment decisions.
The fate of Lenskart’s stock will likely be determined by two factors: immediate market sentiment influencing the listing price and the company’s long-term ability to justify its premium valuation through sustainable profitability.
1. The Immediate Future: Listing Price Outlook
Lenskart’s IPO aims to raise ₹7,278 crore through a price band of ₹382 to ₹402 per share. The listing date is tentatively fixed for November 10.
The Grey Market Premium (GMP) offers a speculative estimate of the listing price, though it is not official data and is based on speculation. GMP trends have shown volatility ahead of the listing.
Table 1: Grey Market Premium (GMP) Trends and Estimated Listing Price
| Metric | Value (As of Friday, 10 a.m.) |
|---|---|
| IPO Upper Price Band | ₹402 per share |
| Latest GMP | ₹66 apiece |
| Estimated Listing Price | ₹468 per share |
| Potential Listing Gain | 16.42% |
Earlier, the GMP had reached a high of ₹120, suggesting a potential listing gain of 27–29%. However, the GMP later dropped, indicating fluctuating market sentiment. The prevailing GMP suggests that investors can expect modest listing gains.
Analyst Prediction on Listing Gain: SBI Securities noted that the listing gain is likely to be muted due to the stretched valuation. Another analyst suggested listing gain is 50/50, potentially reaching the higher side of 20–25%.
2. Core Debate: Valuation vs. True Financials
Lenskart reported a net profit of ₹297 crore for FY25, a sharp turnaround from a loss the previous year. However, this headline profit figure is the subject of significant investor concern.
The Accounting Adjustment: A large portion of this profit, ₹167 crore, stemmed from a one-time accounting gain (FVTPL gain) related to the revaluation of deferred payments from the Owndays acquisition. This non-cash boost flatters the bottom line but does not represent core operational strength.
The Adjusted Profit: After adjusting for this one-time gain, the true or normalized profit for FY25 is closer to ₹130 crore, according to analysts. This adjustment drastically affects the valuation multiples.
Table 2: Lenskart’s Valuation Multiples (Based on FY25 Data)
| Metric | Reported Value (PAT ₹297 Cr) | Normalized Value (PAT ₹130 Cr) |
|---|---|---|
| Market Capitalisation | ~₹70,000 crore (at ₹402 upper band) | ~₹70,000 crore |
| Price-to-Earnings (P/E) Ratio | ~235 times | ~535 times |
| Price-to-Sales (P/S) Ratio | ~10 times (Revenue ₹6,652 Cr) | ~10 times |
Note: The P/E multiple is extraordinarily high, suggesting the IPO is a premium bet on future growth.
3. The Fate of Lenskart: Argument for Success (Bull Case)
Lenskart’s future success rests on its ability to leverage its market dominance and technological edge.
Market Leadership and Opportunity: Lenskart is the largest organized eyewear retailer in India. It commands about 25% of the organized market share. The overall Indian eyewear market is significantly underpenetrated; 65% of those who need glasses are not wearing them. This market is expected to triple by 2032, driven by rising screen time and an aging population.
Integrated Omni-Channel Model: The company operates a vertically integrated, direct-to-consumer (D2C) model. Lenskart runs over 2,800 stores worldwide (2,137 in India as of June 2025), leveraging an efficient network that integrates online ordering with offline fitting and eye tests. This model gives them cost control and high gross margins (around 70% reported).
Growth Trajectory and International Scale: The company has demonstrated strong topline growth, with revenue growing at a CAGR of 32.5% between FY23 and FY25. International operations, bolstered by the Owndays acquisition, contribute significantly, accounting for approximately 40% of total revenue in FY25.
4. The Fate of Lenskart: Risks and Concerns (Bear Case)
Despite its strengths, Lenskart faces several fundamental risks that challenge its high valuation.
Thin Operational Margins: The adjusted net margin of Lenskart is thin, estimated at just 1.9%. This leaves little room for error; any small change in operating costs could push the company back into a loss. Lenskart’s EBIT margin in FY25 was 2.6%, substantially lower than Titan EyeCare’s 10.6%.
Monetization by Promoters and Investors (OFS): The IPO size is ₹7,278 crore, but ₹5,128 crore constitutes an Offer For Sale (OFS), meaning this money goes to existing shareholders, not to the company for growth. This large OFS suggests that older investors are cashing out at elevated valuations.
Co-founder Peyush Bansal’s stake purchased in July 2025 at ₹52 per share—a deep discount to the IPO price of ₹402—further heightens concerns about private investors maximizing gains before going public.
Financial Leverage and Expense: Rapid store expansion has led to soaring lease liabilities, reaching ₹1,701.2 crore in FY25. The company’s finance cost (interest outgo) consumed 83.6% of its operating profit (EBIT) in FY25, indicating high leverage risks.
Supply Chain Dependency: Lenskart sources raw materials and frames from China, where it operates a manufacturing joint venture. This dependence exposes the company to risks of supply chain disruption due to external factors.
5. Analyst Recommendations and Price Targets
Overall, analysts are divided primarily based on their time horizon (short-term listing gain vs. long-term value). The consensus highlights the robust business model but questions the price.
| Analyst/Brokerage | Recommendation | Rationale and Price Implications |
|---|---|---|
| Choice Broking | Subscribe for Long Term | Strong growth potential; suited for investors with a higher risk appetite. |
| SBI Securities | Subscribe for Long Term | Robust business model for long-term play, but valuation is stretched. Listing gains likely to be muted. |
| Nirmal Bang | Subscribe (Long Term View) | Growth prospects cushion high valuations (P/E 235x, EV/EBITDA 68x) compared to peers. |
| Swastika Investmart | Neutral View | Valuation is steep; acknowledges massive growth headroom but notes current profit is influenced by non-cash gains. |
| Sandip Sabharwal | Not Justifiable | Valuation above ₹15,000 crores is not justifiable; business lacks massive scale or growth potential to warrant current pricing. |
Conclusion: A Premium Bet on Flawless Execution
The immediate future listing price, driven by GMP, points to an initial gain of around 16–17% (estimated listing price of ₹468).
However, the long-term fate of Lenskart’s share price depends on converting ambitious projections into recurring, sustainable profits. The ₹70,000 crore valuation implies that investors are paying a hefty premium—over 500 times normalized earnings—for future growth that has yet to materialize operationally.
This is a premium bet on scale, branding, and flawless execution in penetrating the unorganized market. For long-term investors, the valuation already captures much of the potential optimism. The stock may reward investors, but likely over years, not weeks, demanding a high risk appetite and patience to wait for a better entry point that reflects recurring profitability.
