Synopsis: The eyewear retailer’s weak market debut highlights growing investor caution toward overvalued IPOs. Despite strong fundamentals, analysts raised concerns over high valuations, limited profitability, and delayed cash flow gains, signaling the need for realistic pricing and long-term value focus in India’s IPO landscape.
The consumer discretionary eyewear sector in India is rapidly growing, valued at around USD 6.6 billion in 2024. Driven by rising eye health awareness, increased screen time, and fashion trends, the market is expected to expand at a CAGR of approximately 7-11% over the coming years. E-commerce and organized retail are key growth drivers in this dynamic sector.
With a market capitalization of Rs 70,270.92 crore, the shares of Lenskart Solutions Ltd were trading at Rs 405.05 per share, increasing around 0.63 percent as compared to the listing price of Rs 395 apiece.
Analyst Comments
Ambit Capital, one of the well-known brokerages in India, gave a ‘sell’ call on this eyewear company with a target price of Rs 337 apiece, indicating a potential downside of 16 percent from Monday’s price of Rs 402 per share.
Ambit Capital flagged concerns over Lenskart’s capital-intensive made-to-order model, which it says limits profitability and return ratios. The brokerage expects free cash flow to turn positive only by FY28. With a relatively low RoCE of 9% and RoIC of 13% versus peers’ 35–40%, Ambit views current valuations as unjustified and overly optimistic.
Market Sentiment Shifts
On the other hand, Ambareesh Baliga, an independent market analyst, highlighted that while the company’s business model is solid, its current valuation is excessively high. He emphasized that the weak market debut underscores the need for investors to prioritize valuation over hype driven by grey market premiums or oversubscription. Such outcomes, he warned, may dampen retail investor enthusiasm for future IPOs.
Other analysts flagged Lenskart’s steep valuation, with a P/E ratio of 230 seen as excessive. Even with profits tripling, a 70x multiple remains high, raising concerns about limited investor upside. However, CEO Peyush Bansal defended the premium, citing a 90% EBITDA CAGR and strong long-term growth prospects in India’s expanding eyewear market.
Lenskart operates advanced manufacturing units in Bhiwadi and Gurugram, supported by regional facilities in Singapore and the UAE. This centralized production and tightly controlled supply chain enhances quality control, cost efficiency, and delivery speed. The model enables affordable pricing and rapid, next-day delivery in select markets, strengthening Lenskart’s operational edge and customer satisfaction.
Lenskart’s ₹7,278 crore IPO listed on November 10, 2025, at ₹395 per share, a 1.74% discount to its ₹402 issue price. Despite strong investor interest and a ₹14,134 minimum investment, the weak debut reflected valuation concerns and cautious sentiment toward high-priced consumer retail listings.
Lenskart is a leading Indian eyewear retailer revolutionizing the optical industry through its omni-channel model. It offers eyeglasses, sunglasses, and contact lenses both online and offline. With advanced in-house manufacturing and global reach, Lenskart focuses on affordability, innovation, and rapid delivery to enhance customer experience.
Written by Abhishek Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
