Lenskart, India’s largest organised eyewear retailer, has gone public via an initial public offering or IPO. The company has fixed a price band of ₹382-402 per share, which values the company at nearly ₹70,000 crore at the upper end.
At first glance, things look promising: Lenskart reported a net profit of ₹297 crore in FY25, after years of losses. Its revenue is growing, and the business claims to be expanding both online and through retail stores.
But it’s the ₹70,000 crore valuation that has also triggered a controversy on social media where investors seem to be divided. Does a company that has posted profit from non-operational income deserve this valuation? The non-operational income in the case of Lenskart has come from MF gains and FD interests.
What are the main concerns?
Steep Valuation
The high valuation means that investors are being asked to pay a lot for the share of the business they’re buying. One analysis shows that at the upper price band, Lenskart’s price-to-earnings, which is also called as P/E ratio would be around 228x FY25 earnings. What it means is that investors are paying ₹228 for each ₹1 the company earned last year. By comparison, similar listed companies trade at much lower multiples. This means much of the “future growth” is already priced in, leaving less margin for error.
Growth is showing signs of slowing
While revenue grew, the rate of growth has decelerated. For example, revenue in domestic business rose ~26.6 % in FY25 vs higher earlier. The concern is that if growth slows further, paying a premium becomes riskier.
Investor exits raise questions
Some of the funds backing Lenskart (like major private investors) are selling shares in the IPO (via an “offer for sale” portion) and some founders are getting a large payout. This gives rise to the question: Are we investing mainly to benefit early investors exiting, rather than to build long-term value?
Expansion and risk load
Lenskart wants to invest heavily in new stores, technology, and international growth. All this takes money, time and execution. If any of these plans stumble, say for example, international business doesn’t perform, or costs spike, then the high expectations become harder to meet.
Market expectations vs reality
The company is being sold on a “big opportunity ahead” story: growing Indian eyewear market, lower penetration, rising demand. That’s valid, but when you price in the “big” story already, the scope for upside shrinks and the risk of disappointment rises. One phrase in an analysis calls it “a crossroads of optimism and caution”.
As the Lenskart IPO opened today, social media fluttered with takes and counter-takes and memes as well.
What is Lenskart saying about these concerns?
Lenskart points to the large and growing eyewear market in India (and abroad) as a reason for its high valuation. For example, they highlight that by FY25 they reported revenue growth of 22.5 percent and a net profit for the first time.
They say their business is expanding both online (direct to consumer) + offline (stores) and that India’s eyewear market has a lot of untapped potential.
They also talk about expanding their retail footprint: adding many new stores, investing in technology, brand marketing, internationally and in India.