Lenskart’s ₹70,000 crore test: Is its IPO already priced for perfection?

The eyewear retailer plans to raise ₹7,278 crore, including ₹2,150 crore through a fresh issue.

In a market hungry for home-grown consumer champions, Lenskart is pitching itself as a pioneer — a tech-driven brand redefining prescription eyewear with scale and global reach. But at a valuation of about ₹70,000 crore ($7.9 billion), investors must decide whether they are buying into the next Make-in-India icon or a success story that’s already been priced in.

In July, founder and CEO Peyush Bansal bought 17 million Lenskart shares at ₹52 apiece, raising his stake from 9.3% to 10.3%. The move signalled confidence, more “skin in the game" ahead of the company’s initial public offering (IPO) on 31 October. But it also gave early investors a partial exit at a valuation of just ₹8,741 crore.

Barely three months later, the company is seeking public funds at nearly eight times that level. At the top of its ₹382- ₹402 price band, Lenskart will be valued at ₹69,742 crore. To be sure, Fidelity valued the company at $6.1 billion in June, meaning the IPO seeks a roughly 31% higher valuation at $8 billion.

To be sure, Bansal's share purchase valuation is not exactly comparable with Fidelity's, as the former was in lieu of employee stock options (Esops) that he couldn't take as he was tagged a promoter.

Early valuation caution

Yet that jump is hard to ignore. At ₹402 per share, the valuation implies a steep 260x earnings multiple, a rich ask for a 17-year old company that only turned profitable in FY25.

Analysts noted that much of that profit stemmed from accounting changes.

A chunk of its ₹297 crore profit in FY25— ₹167 crore—came from a non-cash gain related to its 2022 acquisition of Japan’s Owndays Inc. The gain arose from re-assessing deferred and contingent payments, boosting reported profit even though no cash was realised. Stripping out the gain, adjusted profit stands at ₹128 crore, compared to an ₹18 crore loss in the previous year.

The ₹128 crore profit was driven by stronger operating performance — higher store productivity, improved gross margins from greater domestic sourcing, and lower commission costs after the company's shift to more company-owned company-operated (CoCo) stores, said Sanath Mondal, head of private markets at Sanctum Wealth.

Analysts believe these efficiency gains, unlike the one-off accounting boost, are structural and repeatable, supporting a more sustainable profitability trajectory.

Interestingly, a ₹90 crore pre-IPO investment last week by DMart founder Radhakishan Damani has lent legitimacy to the valuation leap—a reminder that marquee investors still see long-term promise even at steep prices. The IPO seeks to raise ₹7,278 crore, including ₹2,150 crore via a fresh issue.

Betting on scale, tech and affordability

Founded in 2008 by Bansal, Lenskart has grown into India’s largest eyewear retailer, spanning 2,137 stores across metros and beyond. The company’s proposition rests on integrating manufacturing, technology, and retail—delivering prescription eyewear at affordable prices while maintaining premium positioning. Its omnichannel model, combining online and offline sales, has helped it reach customers across metros and smaller towns.

Between FY23 and FY25, Lenskart’s revenue grew at a 32% CAGR to ₹6,653 crore, with 23% year-on-year growth in FY25. It sold 27 million eyewear units globally and has emerged as India’s largest eyewear brand and Asia’s second-largest by sales volume, SBI Securities noted in a recent report.

“Lenskart is a value-oriented brand with premium options," Bansal told Mint.

At a time when value-led retailers like Trent and Zudio have captured the pulse of India’s cautious consumers, Bansal’s bet is clear — Lenskart’s growth will come from the masses, not the margins.

With nearly six in ten Indians projected to have visual impairments by 2030, and eyewear penetration still below 35%, according to Lenskart’s RHP, the growth runway for organized optical retail remains wide.

That philosophy reflects in the numbers, as well. Around 63% of Lenskart’s customers spent between ₹2,000 and ₹10,000 on eyewear in FY25, with an average selling price of ₹2,370 per unit. “Even in smaller cities, the spending pattern isn’t dramatically different from metros," Bansal said.

The company is now sharpening focus on urban markets. Hence, Lenskart is doubling down on tier 1 and tier 2 cities, which accounted for 61% of the 82 new stores opened in the June quarter.

Powered by AI-led lens production, high automation, and remote eye-testing, Lenskart’s technology backbone has sharpened its efficiency and quality, helping lift sales volumes and customer retention, said experts.

Its remote eye-testing platform connects customers in smaller towns with central optometrists via AI-assisted optical devices, enabling prescriptions without on-site specialists, as per the RHP.

Such consistent execution lends credibility to its growth ambitions, said Nipun Lodha, head of investment banking at PL Capital. Lenskart plans to expand to over 3,400 outlets globally by 2030, from the current 2,806 stores, as per its RHP.

“Lenskart’s growth targets appear reasonable, supported by its strong market leadership and roughly 15% annual growth in existing-store sales," Lodha added.

Sanctum Wealth's Mondal expects this growth to be largely volume-led in the near term.

The efficiency engine

Nonetheless, Mondal said Lenskart’s edge lies in its integrated supply chain and centralised production, which should strengthen profitability and unlock greater value as scale improves.

Lenskart now produces over 70% of its lenses domestically, giving it tighter control over quality and production efficiency. Its 75%-automated Bhiwadi facility in Rajasthan has sharply reduced turnaround times, enabling overnight doorstep delivery in most major cities. The upcoming ₹1,500 crore plant in Telangana promises to enhance efficiency further, according to analysts.

Bansal said that the new Telangana facility will refine the Bhiwadi model, improving delivery speed, inventory turns, and overall return on capital employed.

“Automation and supply-chain centralisation are directly improving our return metrics," Abhishek Gupta, chief financial officer of Lenskart told Mint. Those efficiencies are beginning to show up in the numbers too.

At a consolidated level, the company’s return on capital employed (based on adjusted profit) rose nearly 530 basis points to 8.3% in FY25, year-on-year. Meanwhile, net working capital reduced from 35 to 26 days, despite a near fourfold increase in inventory over a year.

Lenskart’s shift to company-owned and operated stores has made operations leaner. Though more capital-intensive, the format removes franchise payouts and improves oversight, driving higher store-level profitability. As per the RHP, 81% of CoCo stores opened in FY23-24 recovered costs by March 2025, with an average payback of 10 months.

PL Capital’s Lodha expects the company’s profitability to improve as this format scales. “Though results may take two to three years to materialize," he added.

Analysts also see promise in Lenskart’s Gold membership programme, which drives recurring revenue and customer loyalty. In FY25, subscription income rose 63% to ₹108 crore as nearly 1 million new members joined. While the segment now accounts for just 1.6% of revenue, Sanctum Wealth’s Mondal said its high margins could lift overall profitability disproportionately as it scales.

Pricey bet

SBI Securities pegs Lenskart’s valuation at 260x annualized Q1FY26 earnings, a 12-month forward estimate adjusted for one-off gains. In the absence of a direct peer, Lenskart’s valuation mirrors leading consumer-tech firms like Paytm, Zomato, and Nykaa, trading at 100x, 274x, and 307x their FY26E earnings respectively, according to JM Financial.

Analysts say Lenskart’s improving margins are encouraging — net margin based on profits adjusted for one-off accounting gains rose to 3.4% in Q1FY26 from 2% in FY25. Still, its lofty valuation remains the main concern. SBI Securities warned that the valuation appears stretched, suggesting muted listing gains for investors.

Beyond valuation, competition looms as the next big test. Lenskart faces pressure both from the fragmented unorganised market and emerging rivals like Titan Eye+, which already operates over 300 stores in India.

Titan Eye+ is betting on premiumisation, curating brands to meet India’s rising appetite for global labels, its FY25 report said. This premium play contrasts Lenskart’s scale-first, value-led model.

Analysts say Lenskart’s mass focus will drive volumes but could delay margin expansion until operating leverage takes hold. Yet, they note that the company’s ambitions are broader.

The company is chasing scale on a global stage, with nearly 40% of revenue now coming from overseas markets, including Japan, Singapore, and the West Asia. While this underpins much of its valuation story, global exposure also brings its own risks.

The company will remain vulnerable to foreign exchange volatility, differing retail regulations, and a delicate dependence on Chinese raw materials, which still form about half of Lenskart’s inputs, said Sanctum Wealth’s Mondal.

Big ambitions?

Even so, both Mondal and Lodha call Lenskart’s ambition visionary — a Made-in-India tech brand with global reach.

Grey market trends suggest investors are buying into that vision: unlisted shares trade at a 27% premium to the IPO’s upper band of ₹402, reflecting ample appetite for Lenskart’s shares.

“The stock seems fully priced, yet consistent profitability and expansion could still support 20-30% listing gains (in the near-term)," said Lodha.

The question isn’t whether Lenskart can see the future, it’s whether investors are already paying for it.