The IPO of Lenskart Solutions, the country's largest eyewear retailer, drew an overwhelming response, being subscribed nearly 30 times and garnering bids worth over 1.13 trillion.
The qualified institutional buyer (QIB) category was subscribed more than 40 times (x), the high net-worth individual (HNI) portion over 18 times, and the retail segment over seven times, with applications of nearly 3.2 million. The sharp demand came despite concerns around the issue's steep valuations.
The 7,278 crore offering -- the fifth largest this year -- was priced in the range of 382 to 402 per share. The IPO comprised a fresh issue of shares worth 2,150 crore, which the company will use to fund business expansion, technology infrastructure, and marketing initiatives.
At the top end of the price band, Lenskart commands a valuation of 69,727 crore ($7.9 billion) '"-- more than 200 times its FY25 profits and 10 times its annual sales. Experts said while Lenskart's valuation concerns were valid, investors were betting on the company's market position and brand strength as key long-term positives.
'If we consider FY26 earnings, assuming 22 per cent revenue growth and 5 per cent net profit margin, the forward price-to-earnings (P/E) translates to 163x-171x. While premium, it reflects Lenskart's leadership in a fragmented segment,' wrote Insight Provider Tina Banerjee on Smartkarma.
SBI Securities noted that while the issue appeared 'stretched', the company was well placed to capitalise on the fast-growing organised underpenetrated eyeglasses market.
Lenskart operates on an omnichannel model combining its digital platform with 2,806 stores globally, of which 2,137 are in India.
-- Samie Modak, Business Standard