Lenskart IPO 2025: Strong Start but Long-Term Risks Loom
The much-awaited Lenskart IPO 2025 has captured strong attention from investors as subscriptions surpassed 1.5× by the second day of bidding. Retail participation remains especially high, driven by optimism over the brand’s dominant position in India’s eyewear market. The ₹7,278-crore issue, which includes a fresh issue of ₹2,150 crore and an offer-for-sale (OFS) of ₹5,128 crore, has created major market buzz.
Lenskart’s omnichannel approach, combining over 2,500 physical stores with a robust online presence, has helped it build brand trust and accessibility. The company’s data-driven design, in-house manufacturing, and quick delivery model have positioned it as a leader in the segment. However, despite growing revenues, analysts note that thin profit margins and steep valuation could challenge its long-term investment appeal.
Strong Grey Market Premium and Short-Term Momentum
The Lenskart IPO 2025 carries a price band of ₹382–₹402 per share and is commanding a strong grey market premium (GMP) of ₹85. This suggests that shares could list around ₹487, a gain of roughly 21% over the issue price. The robust GMP reflects investor enthusiasm and expectations of near-term listing gains.
However, experts warn that GMP trends can fluctuate quickly, and should not be the only factor in investment decisions. The IPO’s large OFS component indicates that much of the proceeds will go to existing investors rather than fueling new growth. As a result, long-term investors may need to be cautious about entering at high valuations.
CEO Peyush Bansal’s Response to Valuation Concerns
Lenskart’s co-founder and CEO, Peyush Bansal, addressed valuation concerns in a recent media interaction, describing the IPO as “a pit stop, not a destination.” He emphasized that the company aims to use the fresh funds to expand store presence, invest in advanced technology, and strengthen brand recognition globally.
Bansal noted that Lenskart’s focus on innovation—such as AI-powered lens fitting, automated manufacturing, and supply chain efficiency—will drive profitability in the coming years. Yet, despite these plans, some analysts argue that profit margins of around 2% remain low compared to other consumer retail leaders, leaving limited room for error if growth slows.
Growth Potential vs. Financial Fragility
The eyewear sector in India is underpenetrated, with millions of consumers still relying on unorganized local shops. Lenskart’s organized retail model offers vast potential to capture this untapped market, especially as disposable incomes and digital adoption rise. The company’s international expansion into Southeast Asia and the Middle East also adds a global growth angle.
That said, maintaining profitability while expanding aggressively will be a challenge. Rising costs of imported lenses and frames, heavy marketing expenses, and competition from emerging eyewear startups could pressure margins further. Analysts believe that until Lenskart achieves consistent profitability, the stock may remain volatile post-listing.
Investor Outlook: Weighing Gains Against Risks
For short-term investors, the Lenskart IPO 2025 offers a compelling opportunity for listing gains given the strong GMP and brand popularity. But for long-term investors, caution is advised. The high valuation—around ₹69,700 crore ($7.9 billion)—appears ambitious relative to the company’s modest profit base.
While Lenskart’s growth story is strong, sustainable earnings and improved operational margins will be key to justifying the premium. Until then, the IPO remains an attractive short-term trade but a potentially risky long-term hold. As the subscription window closes on November 4 and listing nears, market participants will watch closely to see whether investor enthusiasm translates into lasting market performance.
Source: Financial Express
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