Lenskart IPO Day 2 Highlights: Issue booked 2.02x; GMP signals 21% listing gains — Should you apply amid valuation woes?

Lenskart IPO was subscribed 2.02 times on the second day of the bidding process on Monday, November 3. Here's how different quotas were booked:

QIB: 1.64x

NII: 1.89x

Retail: 3.33x

Employee: 2.62x

The company opened 1,280 stores across the country during the three months ended June 30, 2025, and the Financial Years 2025, 2024, and 2023.

Furthermore, 80.80% — or 568 out of the 703 CoCo stores opened during Financial Years 2024 and 2023 (which were active as of March 31, 2025) — achieved store payback by March 31, 2025, with an average payback period of 10.29 months.

The table below presents the average payback period of all new CoCo stores opened by the company across various city tiers in India during Financial Years 2023 and 2024.

During the three months ended June 30, 2025, and the Financial Year 2025, Lenskart’s India segment total revenue as per Ind AS 108 amounted to ₹11,691.84 million and ₹40,604.66 million, respectively.

The company’s India segment results pre-depreciation and amortisation stood at ₹2,280.77 million and ₹4,894.76 million, respectively, reflecting a CAGR of 30.29% in India segment total revenue (as per Ind AS 108) and a CAGR of 111.67% in India segment results pre-depreciation and amortisation between Financial Years 2023 and 2025.

According to the Redseer Report, Lenskart is India’s largest and fastest-growing eyewear company in terms of revenue from operations for the Financial Years 2025, 2024, and 2023.

Lenskart is a direct-to-consumer company that designs and sells a wide range of eyewear products under its own brands and sub-brands.

The company designs its eyeglasses, including both frames and lenses, supported by a 109-member design and merchandising team as of June 30, 2025. Lenskart offers products across a wide range of price points and age categories, catering to the requirements of an entire household.

During the three months ended June 30, 2025, and the Financial Year 2025, the company launched 42 and 105 new in-house designed and engineered collections globally, respectively, including collaborations with popular brands and celebrities. The two-year purchase frequency among new customer accounts acquired in Financial Year 2023 was 3.62 eyeglasses, compared to an India average of 1.8 eyeglasses, according to the Redseer Report.

The objects of the offer are as follows:

(i) Capital expenditure towards set-up of new CoCo stores in India;

(ii) Expenditure for lease/rent/license agreements related payments for CoCo stores operated by the Company in India;

(iii) Investing in technology and cloud infrastructure;

(iv) Brand marketing and business promotion expenses for enhancing brand awareness; and

(v) Unidentified inorganic acquisitions and general corporate purposes.

Key risks include:

• Intense competition in the eyewear and retail segments, which could pressure pricing and margins.
• The company’s rapid store expansion and international ventures pose execution and operational risks.
• Dependence on technology systems, AI tools, and data management creates cybersecurity and privacy concerns.
• Supply chain disruptions or overreliance on key suppliers may impact production.
• Additionally, changes in consumer preferences, regulatory shifts, and currency fluctuations could affect performance and profitability.

Between FY23 and FY25, the company delivered strong topline growth, with revenue rising from ₹3,788 crore to ₹6,652.5 crore, reflecting a CAGR of 28.8%.

The company turned profitable with a net profit of ₹297.3 crore, compared to a loss in the previous year, while EBITDA surged 44.5% YoY to ₹971 crore, reflecting improved operational efficiency and margin expansion.

Aggressive Valuation

P/E >200x and EV/Sales ~10x make the IPO valuation extremely demanding with minimal margin for error.

Profit Quality Concern

FY25 profit of ₹297 crore largely stems from a one-time, non-cash accounting gain.

Strong Growth Potential

Targeting India’s vast, under-penetrated eyewear market positions Lenskart for long-term expansion.

Investor Confidence

Entry of veteran investor Radhakishan Damani adds credibility and market confidence.

Investment View

Solid business fundamentals but stretched valuations lead to a Neutral rating on the IPO.

Lenskart IPO saw its NII portion being fully subscribed on the second day of bidding. It was the only segment that did not sail through on Friday. As of 11.28 am, NII portion was booked 1.04 times, garnering bids for 2,82,63,967 shares as against 2,71,00,803 shares on offer.

Lenskart reported a net profit of Rs. 297 cr on revenues of Rs. 6,652 cr in FY25. However, this includes a Rs. 167.2 cr FVTPL gain related to the Owndays acquisition. Excluding this one-time item, the normalized profit declines to Rs. 130.1 cr, resulting in a modest 1.96% net margin, compared to the reported 4.24%.

In Q1 FY26, the company reported a PAT margin of 3.23%, which also includes a Rs. 5.57 cr FVTPL gain. Adjusting for this, the underlying PAT stands at Rs. 55.6 cr on Rs. 1,940 cr revenue, implying a slightly better 2.8% net profit margin. While this shows incremental operational improvement, but profitability remains thin relative to the company’s premium IPO valuation.

Based on pre-issue shareholding, the adjusted EPS works out to Rs. 0.77, translating to a PE multiple of ~520x, which further expands to ~535x post-issue underscoring stretched valuations versus earnings potential. Despite its large scale, Lenskart’s profitability remains weak. A normalized 1.96% net margin on over Rs. 6,650 cr in revenue is concerning, especially when several smaller peers deliver stronger profitability. The Rs. 69,726 cr valuation appears difficult to justify against a Rs. 130 cr normalized profit, implying that much of the optimism is already priced in.

Moreover, by not adjusting for one-time gains, investors are presented with an artificially inflated profit, making the valuation appear less expensive than it truly is. While the company’s 70% gross margin is healthy and in line with industry standards, the sharp drop to a 2% net margin highlights inefficient cost scaling and high operating expenses.

At the proposed valuation, Lenskart is essentially asking investors to pay ~535x normalized earnings for a business with thin margins and slowing revenue growth, which has moderated to 17% from 46% in the previous year, a level more typical of mature retail businesses. Beyond valuation concerns, additional risks remain like promoters are selling Rs. 1,100 cr worth of shares through the OFS, suggesting limited near-term confidence and an opportunity to monetize holdings at elevated valuations.

— Views by Abhinav Tiwari, Research Analyst at Bonanza

Lenskart IPO was subscribed 1.40 times so far on the second day of the bidding process on Monday, November 3. Here's how different quotas were booked:

QIB: 1.42x

NII: 90%

Retail: 2.05x

Employee: 1.62x

India’s eyewear market, valued at US$9.2 billion in FY25, is expected to grow at a robust 13% CAGR to reach US$17.2 billion by FY30—expanding nearly 1.5x faster than the overall retail sector and 3x the pace of global eyewear growth.

Prescription eyeglasses dominate the market with approximately 73% share by value, followed by sunglasses and contact lenses.

This growth will be driven by rising screen time, increasing awareness of vision correction, growing fashion consciousness, and higher disposable incomes.

With its omni-channel model, technology-led customer experience, and affordable premium range, Lenskart is well positioned to tap into this large, underpenetrated domestic opportunity and further expand across Southeast Asia and the Middle East.

Lenskart IPO bidding kicked off for the second day today. Investors can apply for the IPO till 5 pm today. Additionally, Tuesday is the final and last day to bid.

“Lenskart’s ₹7,278 crore IPO offers scale but not necessarily value. Priced at 230x FY25 P/E, it trades well above global leaders like Essilor Luxottica. Nearly 70% of the issue is secondary, with early investors exiting at 8x their entry valuation in under a year. With recurring profits at ₹128 crore and growth slowing to 18%, the fundamentals appear stretched. A wait-and-watch approach seems prudent for long-term investors.”

— Views by Gaurav Garg, Research Analyst, Lemonn Markets Desk

The initial public offer of eyewear retailer Lenskart Solutions Ltd sailed through on the first day of bidding on Friday, driven by institutional buyers' and retail investors' demand.

The ₹7,278-crore IPO received bids for 11,22,94,482 shares against 9,97,61,257 shares on offer, translating into 1.13 times subscription, as per NSE data.

Among investors' categories, Qualified Institutional Buyers (QIBs) part attracted 1.42 times subscription, while the quota for Retail Individual Investors (RIIs) got subscribed 1.31 times. The category for non-institutional investors received 41 per cent subscription.

The grey market premium (GMP) for Lenskart stood at ₹85 today. This means that Lenskart IPO shares are trading ₹85 higher than the issue price of ₹402. At the prevailing GMP and issue price, Lenskart shares could list at ₹487 on the bourses, a premium of 21.14%.