Lenskart Solutions Ltd.

Great Business, Investor Concerns Over Valuation

Promoters of Lenskart Solutions had acquired shares at Rs. 52 per share in July 2025 from certain institutional investors. However, within just four months, the valuation has surged to Rs. 402 per share, prompting investors and media to seek clarification from the company’s prominent Shark Tank representative regarding this sharp revaluation.

The Initial Public Offering (IPO) is a Book Built Issue comprising a fresh issue of shares worth Rs. 2,150 crore and an Offer for Sale (OFS) of Rs. 5,128 crore by existing shareholders and promoters at the upper price band of Rs. 402 per share.

OFS details:

Objects of the Fresh Issue

The company intends to utilize the proceeds from the fresh issue amounting to Rs. 2,150 crore as follows:

• Capital expenditure for setting up new Company-Owned Company-Operated (CoCo) stores in India – Rs. 272.6 crore
• Expenditure for lease/rent/license agreements for CoCo stores in India – Rs. 591.4 crore
• Investment in technology and cloud infrastructure – Rs. 213.4 crore
• Brand marketing and promotion – Rs. 320.0 crore
• Funding potential acquisitions and general corporate purposes – Rs. 752.6 crore

Following the issue, the promoters’ stake will dilute from 20% to 17.5%, while institutional and other shareholders will hold the remaining equity.

Financial Performance:

Financial Performance:            

Lenskart reported a profit of Rs. 297 crore in FY25, marking a strong turnaround from a loss of Rs. 10 crore in FY24, as revenue rose from Rs. 5,428 crore to Rs. 6,652 crore. The improvement was partly driven by a one-time adjustment of Rs. 166 crore added to the bottom line. Similar to many startups, the company reported profits just ahead of its IPO following years of losses.

For the three months ended June 2025, Lenskart recorded a profit of Rs. 61 crore on revenue of Rs. 1,894 crore, compared with a loss of Rs. 11 crore in the corresponding period of the previous year.

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Market for the Products:

India’s eyewear market is witnessing a major transformation driven by increasing awareness of refractive errors, rising digital screen exposure and an aging population, which are fueling demand for vision correction. The market is projected to grow at a CAGR of around 13%. Prescription eyeglasses currently dominate with a 73% share while organized retail is gaining strong traction and is expected to capture 31% of the market by 2030, up from 19% in FY24.

Peer Comparison:

Lenskart faces competition from Titan Eyecare (a division of Titan), Lawrence & Mayo, Gangar Opticians, GKB Opticals, and Eyegear Optics. Titan with 700 stores holds a 5% market share, whereas Lenskart, with over 2,000 stores, commands nearly five times Titan’s market share.

In terms of valuation, Lenskart is valued at 10x its turnover with a P/E multiple of 235x. comparatively, global eyewear major Essilor Luxottica is valued at 4.5x turnover with a P/E multiple of 50x and Warby Parker, another global player, trades at 4x revenue. Even Titan Eyecare is valued at nearly half of Lenskart’s valuation, making Lenskart’s pricing appear significantly stretched.

Risk Factors:

As per the RHP, the company sources a part of its frames and components from China through its joint venture Baofeng Framekart, which exposes it to supply-chain and geopolitical risks. The company’s high valuation—over 200x P/E—appears expensive relative to its profit growth. Historically, several startup IPOs have seen steep corrections post-listing, with share prices dropping between 24% (Swiggy) and 86% (Paytm) from their IPO levels, while others like Ola and Paytm continue to trade below their issue price.

Peer Comparison FY25:

Post issue, Lenskart’s valuation is projected at around Rs. 70,000 crore. In the pre-IPO funding round, DMart’s Damani family invested Rs. 90 crore while SBI Mutual Fund infused Rs. 100 crore. The company has attracted an impressive lineup of 147 anchor investors, collectively contributing Rs. 3,268 crore at the upper price band of Rs. 402 per share.

In the grey market, the premium has moderated—from a peak of Rs. 110 to a low of Rs. 50—and currently stands around Rs. 70, implying a listing price near Rs. 450+. However, it must be noted that the grey market premium (GMP) is unofficial, unreliable and merely indicative of sentiment rather than actual performance potential.

While Lenskart represents a strong business model with encouraging growth prospects, the IPO pricing appears extremely stretched, leaving little room for error. Sustaining above such an exorbitant valuation will require exceptional financial and operational performance.