In a disappointing market debut, Lenskart Solutions Limited saw its shares list at a significant discount on Monday, November 10, defying expectations and becoming the third consecutive initial public offering to deliver underwhelming returns to investors within a single week.
Subdued Market Entry Despite Strong Demand
The much-anticipated Lenskart IPO made a tepid entry on Dalal Street, with shares listing at ₹390 on the BSE, representing a 2.99% discount to the initial public offering price of ₹402. On the National Stock Exchange, the eyewear retailer's stock began trading at ₹395, marking a 1.74% decline from the issue price.
This muted performance came as a surprise to market observers, particularly given the positive signals from the grey market. The latest grey market premium (GMP) of ₹10 had suggested an anticipated listing pop of over 2%, making the actual discount even more notable for India's largest eyewear retail chain.
Expert Concerns Over Valuation and Fundamentals
Financial experts had expressed caution ahead of the listing, with Harshal Dasani, Business Head at INVAsset PMS, highlighting potential risks. "In an industry still fragmented and highly price-sensitive, this IPO looks more sentiment-driven than fundamentally compelling," Dasani had commented. "While subscription numbers look spectacular, investors chasing listing gains may be in for muted returns. The excitement is real — but so are the risks."
The lackluster debut occurred despite overwhelming investor interest during the subscription period. The ₹7,278-crore IPO witnessed massive demand, receiving bids for 281,88,45,629 shares against the 9,97,61,257 shares on offer, resulting in an impressive 28.26 times overall subscription.
Breakdown of Investor Categories and Fund Utilization
Institutional investors showed particularly strong confidence in Lenskart's prospects, with the Qualified Institutional Buyers (QIBs) quota fetching 40.35 times subscription. The non-institutional investor category garnered 18.23 times subscription, while retail investors demonstrated solid interest with 7.54 times subscription.
The IPO comprised a fresh share sale of ₹2,150 crore and an offer for sale of 12.75 crore shares by the company's promoters and existing investors. At the upper end of the price band ranging from ₹382 to ₹402 per share, Lenskart targeted a valuation of ₹69,700 crore.
Lenskart plans to utilize the proceeds from the fresh issue to fund several strategic initiatives, including capital expenditure for establishing new company-owned and company-operated (CoCo) stores across India. The funds will also support payments related to lease, rent, and license agreements for these outlets, investments in technology and cloud infrastructure, brand marketing, and promotional activities to strengthen brand visibility. The company may also deploy capital for potential inorganic acquisitions and other general corporate purposes.
Founded in 2008, Lenskart has grown to become one of India's largest omni-channel eyewear retailers, offering a comprehensive range of prescription eyeglasses, sunglasses, and contact lenses. The company maintains a significant presence across metro, tier-1, and tier-2 cities in India, while also operating internationally in Southeast Asia and the Middle East.
The book-running lead managers for the offer included Kotak Mahindra Capital Company, Morgan Stanley India Company, Avendus Capital, Citigroup Global Markets India, Axis Capital, and Intensive Fiscal Services.
