On its first day of trading on the stock market, Lenskart’s failed to match the excitement that had built around its IPO in recent weeks.On Monday, the stock listed at Rs 390 on the NSE, entering 3% lower than the issue price of Rs 402. For a company widely regarded as one of India’s most promising consumer-tech names and heavily discussed ahead of listing, the muted debut came as a disappointment. The eyewear platform entered the market with a valuation of around Rs 70,000 crore. Yet, just before listing, its grey market premium slid from Rs 108 at its peak to zero. The drop reflected a sharp pullback in appetite, suggesting investors were no longer willing to pay a premium even before the shares hit the exchange.Many are left wondering – what went wrong? Was it the timing, or was the stock overhyped?Here are top facts that investors should know:
Pitch overshadowed by valuation concerns
Lenskart’s valuation at the upper end of the price band placed it far ahead of established players in the listed retail universe. At Rs 402, the company stood at 10.1x FY25 EV/Sales and 68.7x EV/EBITDA, as estimated by SBI Securities. These metrics put Lenskart higher than names such as Titan, Trent and Nykaa.SBI Securities, as cited by ET, flagged the pricing in advance, stating, “Valuation of Lenskart seems stretched and hence listing gain is likely to be muted.” Even so, it viewed Lenskart as a long-term story based on the brand’s position and the still underpenetrated eyewear category in the country.Ambit Capital took a different approach. It initiated coverage with a ‘Sell’ call and assigned a target price of Rs 337, indicating a 16% downside from the issue price. The firm argued that although revenue could grow at 20% CAGR between FY25 and FY28, the business would continue generating only modest returns.“Scaling requires heavy capacity investments — nearly Rs 20,000 crore over FY25–28, which will keep free cash flows constrained until FY28. The implied valuation premium is unwarranted given its low capital efficiency,” Ambit said.With such views coming in even before the listing, investors found little reason to chase the stock at higher levels.
Profitablity concern
The company reported a profit of Rs 297 crore in FY25 on revenue of Rs 6,653 crore, a jump from a loss of Rs 64 crore two years ago. However, a major portion of that profit came from a one-time gain. Rs 167 crore of the total was linked to the Owndays acquisition, reducing the adjusted profit to roughly Rs 130 crore. That translated to a slim margin of 1.9%.In Q1 FY26, Lenskart posted a profit of Rs 55.6 crore on revenue of Rs 1,940 crore, taking margins to 2.8%. While this showed improvement, analysts pointed out that profitability is still narrow and dependent on scale efficiencies.Brokerages tracking the company noted that revenue has expanded sharply, 32.5% CAGR over FY23–25, but margins have not kept pace. For investors expecting long-term, steady margin expansion, reliance on a one-time accounting gain raised doubts.
Market mood shifts
Even though the IPO received a strong response, subscribed 28 times overall and 45 times in the institutional category, the tone in the secondary market turned cautious by the time the stock was ready to list. Commentary among traders suggested a broader weariness toward richly priced tech and digital-economy offerings, especially in a market already trading near peak valuations.As one analyst summed it up, “There’s no doubt Lenskart has built a strong brand and omnichannel presence, but the market expected miracles. When you price perfection, even a great company can disappoint on listing day.”Despite the weak debut, Lenskart still carries the advantages that drew investors in the first place. It remains the largest eyewear retailer in India, among the top two in Asia, and has expanded internationally through Owndays. The company also benefits from strong brand recognition and a tech-led supply chain.The stock’s performance from hereon depends on its ability to show sustainable profitability over the coming quarters, not just revenue growth or one-off gains. For investors, the next phase will reveal whether the slow start was only a temporary slip or an early warning sign of tougher expectations ahead.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
