Lenskart’s IPO, priced ₹382-402 per share, seeks ₹7,278 crore, valuing the eyewear firm at ₹70,000 crore with a 260x PE ratio. Amid weak margins and promoter selling, analysts debate its justification against strong growth potential.
Quick Insights:
- Lenskart IPO valued at ₹70,000 crore with 260x PE.
- FY24 profit only ₹130 crore on ₹6,650 crore revenue.
- Analysts cautious—high valuation, low margins, promoter selling.
- Strong growth outlook but post-listing caution advised.
IPO Details and Valuation Breakdown
The offering includes ₹2,150 crore fresh issue and 127.6 million shares for sale. At upper band, market cap reaches ₹69,742 crore, backed by ₹6,650 crore FY24 revenue and ₹297 crore profit—though normalized to ₹130.1 crore with 1.96% margin due to one-time gains.
Analyst Concerns and Risks
Brokerages rate it’neutral,’ flagging the high PE, low margins, and Peyush Bansal’s ₹1,100 crore stake sale. Religare suggests 40-60x PE as fair, citing risks from competition and profitability challenges.
Growth Potential and Investor Outlook
- Strong revenue growth (30-40% in FY24) and market expansion into eyewear retail, projected to reach ₹1,483 billion by FY30.
- Omni-channel strategy, private-label dominance, and international presence position Lenskart for long-term success.
- Oversubscribed 1.1x on day one, with grey market premiums at 24%, indicating optimism; however, analysts warn of potential post-listing dips and advise caution for long-term bets on margin improvement.
Conclusion:
Lenskart’s IPO reflects strong investor confidence and a compelling growth story, but its sky-high valuation and thin margins raise caution. While the brand’s market leadership and expansion potential are undeniable, sustained profitability and execution will determine whether this eyewear giant truly delivers long-term vision—or just short-term hype.
