Lenskart Shares List at 3% Discount Amid Valuation Concerns

Peyush Bansal-led Lenskart Solutions Ltd made a weak stock market debut on Monday, listing its shares at about a 3% discount to the issue price of its initial public offering (IPO). The shares were listed at ₹390 on the BSE at 9:50 a.m., compared to the IPO price band of ₹382–₹402.

On the NSE, the eyewear retailer was trading 1.74% lower at ₹395 per share around the same time.

The IPO of Lenskart was subscribed 28.26 times between October 31 and November 4.

However, Lenskart’s market debut fell short of expectations, with the stock listing at only around a 2% premium despite strong grey market predictions.

The company plans to use the IPO proceeds for strategic initiatives, including capital expenditure to open new company-owned, company-operated (CoCo) stores; lease and rent payments; investments in technology and cloud infrastructure; brand marketing; potential acquisitions; and general corporate purposes.

The most debated aspect of the IPO was its ₹70,000 crore ($7.7 billion) valuation sought from investors, giving the company a price-to-earnings (P/E) ratio of around 237.

On social media and among investor communities, eyebrows were raised over this valuation for a company that turned profitable for the first time in FY25.

The company posted a net profit of ₹297.3 crore in FY25, after incurring losses of ₹64 crore in FY23 and ₹10 crore in FY24.

However, most of this profit did not come from its core eyewear business. It was largely driven by “other income”, which rose by about 96%, from ₹182 crore in FY24 to ₹357 crore in FY25. Other income refers to earnings from sources outside a company’s regular operations. For instance, in FY25, ₹72.6 crore of this came from Lenskart’s mutual fund investments.

Abhishek Kumar, founder and chief investment advisor of Sahaj Money earlier told Outlook Business that at the current profit level, it would take almost 300 years to justify that valuation, that's essentially what the P/E ratio shows.

“The business as an operating entity is not generating profit. It is the investment income or other income that helped them show profit,” he said, while calling it “window-dressing” of valuation before launching the IPO. He further stated that retail investors should either miss early gains or wait until the business starts generating real operating profit, if they are not able to evaluate opaque businesses. “If you don’t understand how a business makes money, don’t invest”.

At BSE, the company’s shares were trading down with a market capitalisation of  ₹67,139.48 crore.