India's largest eyewear company, Lenskart, launched its ₹7,278 crore IPO on October 31st, and by 11 AM on the first day, it was subscribed 9%. The Grey Market Premium (GMP) has increased by approximately 18%. However, analysts have advised investors to exercise caution due to the high valuation.
Lenskart IPO: Lenskart Solutions Ltd.'s ₹7,278 crore IPO opened for investors on October 31st. By 11 AM on the first day, the issue was subscribed 9%, with retail investors accounting for 37% of the subscription. The company is raising funds through a fresh issue of ₹2,150 crore and an offer-for-sale of 12.75 crore shares. The GMP for this IPO, with a price band of ₹382–₹402, has reached approximately 18%. Analysts suggest that the valuation is expensive, advising investors to make informed decisions.
Strong Trend in Grey Market
Investor interest in Lenskart's unlisted shares was already robust. The Grey Market Premium (GMP) reached approximately 18.4% on the first day, indicating an increase of about 1% compared to the previous day. On Wednesday, the GMP was 17.4%, whereas it was only 11.9% prior to that.
According to IPO Watch, some market reports indicated this premium to be between 11 and 12 percent. Despite this, the market sentiment remains positive. Analysts believe that Lenskart's b brand and technology-driven model are attracting investors.
Day 1 Subscription Status
By 11 AM on the first day of the IPO, it was subscribed 9%.
- The retail investor portion was subscribed 37%.
- Non-Institutional Investors (NIIs) subscribed up to 8%.
- No significant bids had yet been received from Qualified Institutional Buyers (QIBs).
The company has set the IPO's price band at ₹382 to ₹402 per share. The minimum investment starts with 37 shares, amounting to approximately ₹14,874. The issue will remain open until November 2nd. Share allotment is expected on November 5th, and listing on November 10th.
Company's Business Model and Growth
Lenskart has rapidly expanded its business in recent years. The company's model is based on an omni-channel strategy, encompassing both online and offline platforms. Lenskart has thousands of stores in India and has now established its presence in international markets such as Singapore, the Middle East, and Europe.
Analysts state that the secret to the company's success lies in its technology integration and customer-centric approach. Facilities ranging from online booking to free eye tests and home delivery have made it a preferred brand among people.
Questions Raised Over Valuation
However, some market experts are advising caution regarding the company's valuation. According to reports, Lenskart's P/E valuation is stated to be approximately 230 times, which many analysts consider an "expensive deal."
Peyush Bansal, Co-founder and CEO of Lenskart, stated in an interview that the company's objective is not merely to increase valuation, but to create "real value" for both customers and shareholders. He added, "Ultimately, the market determines what the true value is."
The company claims that its EBITDA CAGR has been up to 90% in the past few years. Furthermore, India's eyewear market is still "under-penetrated," indicating significant growth opportunities for the company in the future.
Strong List of Anchor Investors
Before the IPO even opened, Lenskart had already raised ₹3,268.4 crore, involving several major global investors. The company received investments from 147 anchor investors, including prominent names like Goldman Sachs, BlackRock, Fidelity, T Rowe Price, Nomura, JP Morgan, and the Government of Singapore.
Analysts' Opinion
Market expert Shravan Shetty (Primus Partners) stated that investor interest is high because Lenskart is perceived as a technology-driven consumer company.
According to Siddharth Maurya (Vibhavangal Anukulakara), while the company's growth is excellent, increasing competition in the international market and operational costs could pose challenges for it.
Shivani Nyati (Swastika Investmart) commented that the business model is b, but the valuation is high, which is why she has given this IPO a "Neutral" rating.
