Lenskart's ₹7,278 Crore IPO Fully Subscribed on Day 1: What It Means for Retail Investors

Lenskart’s ₹7,278 Crore IPO Fully Subscribed on Day One—But Is the Valuation Justified?

On October 31, 2025, eyewear retailer Lenskart Solutions’ much-hyped ₹7,278 crore initial public offering received full subscription on its opening day itself, marking yet another blockbuster IPO in India’s booming consumer-tech space. With an overall subscription rate of 1.13 times on Day 1, strong institutional interest, and retail participation, the IPO has become the talk of the market. But beneath the excitement lies a critical question: is this a genuine investment opportunity or a textbook case of market euphoria?

The answer is more complicated than it seems.

The Subscription Numbers Tell a Story

Lenskart’s opening-day performance reflected robust demand across all investor categories. The qualified institutional buyers (QIB) portion was subscribed 1.42 times, while retail individual investors (RIIs) showed solid interest at 1.31 times subscription. Non-institutional or high-net-worth investors, however, received only 0.41 times bids—a sign that even wealthy investors were exercising some caution despite the overall buzz.

A day earlier, the company raised ₹3,268.35 crore from 147 anchor investors at the upper end of the price band of ₹402 per share. This anchor participation included heavyweight domestic mutual funds—SBI, HDFC, ICICI Prudential, Kotak, Axis, and Aditya Birla Sun Life—alongside major insurance companies like SBI Life and HDFC Life. Internationally, sovereign and institutional investors including the Government of Singapore, Norway’s Government Pension Fund Global, BlackRock, Fidelity, and Goldman Sachs also participated, suggesting serious institutional confidence in the company’s long-term prospects.

The Elephant in the Room: Valuation

Here’s where the story gets interesting—and potentially worrisome. Lenskart’s IPO is priced at a post-issue P/E multiple of approximately 285 times FY25 earnings, making it one of India’s costliest consumer-tech listings. To put this in perspective, the company’s FY25 net profit stood at just ₹297 crore (after adjusting for one-time gains from its Owndays acquisition), translating to a profit margin of only 1.96% on revenues of ₹7,009 crore.

At a market capitalization of nearly ₹70,000 crore, the IPO prices in significant future growth expectations. Market veteran Shankar Sharma has called India’s IPO market “the dumbest IPO market,” yet he interestingly noted that Lenskart’s valuation is actually not out of line with how earlier startups like Paytm and Nykaa were priced—a commentary on how Indian IPO valuations have become consistently stretched across the board.

Brokerage firms Swastika Investmart and Religare Broking have issued neutral ratings on the stock, acknowledging that while Lenskart’s fundamentals are impressive—strong brand recall, omnichannel reach, and global expansion—near-term upside may be limited unless profitability improves significantly.

A Company on the Rise (But Still Proving Itself)

Don’t get us wrong: Lenskart is fundamentally a solid company. Founded in 2008 by Peyush Bansal, the company has evolved from a scrappy online startup into India’s largest eyewear retailer with over 2,000 stores domestically and 650+ stores internationally. The company operates a highly automated manufacturing facility in Bhiwadi (Rajasthan), giving it control over its supply chain—a competitive advantage in the eyewear business.

The numbers support the growth narrative. Revenue surged from ₹3,928 crore (FY23) to ₹7,009 crore (FY25), while the company successfully turned profitable with ₹297 crore in net profit in FY25, compared to a ₹10 crore loss in FY24. EBITDA margins improved to approximately 13.8% by FY25. The company’s robust order book and rising optical penetration in India also present a genuine tailwind for expansion.

The IPO Offering and What Lenskart Will Do with the Money

Lenskart is raising ₹7,278 crore through a mix of fresh issue (₹2,150 crore) and offer-for-sale (₹5,128 crore). According to the Red Herring Prospectus, the capital will primarily be deployed toward:

• New store expansion: ₹272.62 crore for company-operated stores (CoCo) setup
• Store operating costs: ₹591.44 crore for lease, rent, and license agreements
• Technology infrastructure: ₹213.38 crore for tech and cloud upgrades
• Brand marketing: ₹320.06 crore for awareness and promotion
• Inorganic acquisitions and corporate purposes: The remainder

This spending pattern reveals Lenskart’s continued aggressive growth focus, which could be a double-edged sword—exciting for growth investors but demanding of execution perfection.

Market Sentiment: A House Divided

The IPO has sparked polarized reactions. On one side, Deepak Shenoy, CEO of Capitalmind Asset Management, warned that “IPOs could go anywhere,” reminding investors of the inherent unpredictability in the short term. His commentary echoed broader concerns about whether Lenskart’s high valuation will sustain post-listing or deflate like many overhyped debuts.

On the other side, the strong institutional anchor book and the general market appetite for consumer-tech stories (especially following Honasa Consumer’s post-IPO surge) suggest that listing gains are not off the table. The grey market premium (GMP), estimated at ₹35–₹45 per share, implied expected listing gains of 8–11%, though such GMP estimates are informal and often misleading.

What to Watch Next

Listing Date: Lenskart is scheduled to list on November 10, 2025, marking a watershed moment for the company and India’s eyewear retail sector.

Profitability Trajectory: Investors should closely monitor whether Lenskart can maintain or improve its 1.96% net margin as it scales. Margin compression during rapid expansion would be a red flag.

Execution on Store Expansion: The company plans significant new store rollouts. Watch for quarterly updates on store additions, foot traffic metrics, and same-store sales growth.

Competitive Dynamics: Keep an eye on how established eyewear chains and international players respond to Lenskart’s public status. Pricing wars could emerge.

Capital Deployment Efficiency: Track how efficiently Lenskart deploys the ₹7,278 crore raised. Wasteful marketing spend or underutilized store infrastructure would disappoint investors.

Market Sentiment on Consumer Tech: Lenskart’s post-listing performance will likely influence sentiment toward other consumer-tech IPOs lined up for November, including Groww (₹6,600 crore), ICICI Prudential AMC (₹10,000 crore), and Pine Labs (₹6,100 crore).

The Bottom Line for Retail Investors

Lenskart is a well-run, profitable company operating in a growing category with strong brand equity. Its omnichannel model, manufacturing capabilities, and expansion into Tier-2/3 cities and overseas markets are genuine strengths. However, the ₹70,000 crore valuation leaves minimal room for disappointment.

If you’re chasing the listing pop alone, the risk-reward has become moderate, especially given that GMP has cooled from its earlier peaks. If you’re a long-term investor with a 3–5 year horizon and genuinely believe in India’s eyewear retail story, the IPO deserves consideration—but allocate prudently and avoid concentrating too much capital into a single listing.

As Deepak Shenoy aptly put it: “The market’s mood, not the model, often decides the first few weeks after listing.” With Lenskart, the fundamentals are sound, but the valuation has already priced in a significant portion of the growth story. Enter with caution, monitor execution closely, and remember that stellar companies at overextended valuations rarely deliver stellar returns.

Disclaimer: This article is only for information purposes and is not investment advice. Before investing, do your own research.