Lenskart had a lackluster market debut today, disappointing investors anticipating strong gains following its heavily subscribed IPO. The stock opened at Rs 395 on the National Stock Exchange (NSE), below the issue price of Rs 402, while on the BSE, it listed at Rs 390, representing a 2.98% discount.
The subdued start followed a decline in the company’s grey market premium (GMP) prior to listing. Initially hovering around Rs 95, the GMP suggested potential listing gains of nearly 24% at the start of the IPO subscription period. However, the drop in GMP signaled caution among traders, leading to a tepid debut despite robust demand during the IPO phase.
Lenskart’s IPO, valued at Rs 7,278 crore, garnered significant investor interest during the three-day bidding window from October 31 to November 4. The subscription was over 28 times, with strong participation from institutional and retail investors. Notably, the qualified institutional buyers (QIB) category saw a 45-time subscription, non-institutional investors subscribed 18.23 times, retail investors showed high interest at 7.54 times, and employees fully subscribed at 4.96 times.
Comprising a fresh issue of Rs 2,150 crore and an offer for sale (OFS) of 12.75 crore shares, the IPO was priced in the range of Rs 382–Rs 402 per share, valuing the company at around Rs 70,000 crore. Lenskart announced that the raised funds would be utilized for expanding retail operations, upgrading technology, and enhancing marketing efforts.
Despite the positive response to the IPO, some analysts raised concerns over Lenskart’s high valuation, with its price-to-earnings (P/E) ratio and premium pricing deemed expensive compared to industry peers. This, coupled with profit-taking by short-term investors, likely contributed to the subdued listing performance.
Market analysts suggest that the weak listing does not necessarily indicate poor long-term prospects for Lenskart. The eyewear sector in India is on a growth trajectory, and Lenskart’s strong brand presence, expanding store network, and focus on technology could pave the way for sustained growth over time.
While short-term investors may face limited upside due to high valuations and profit booking post-IPO, long-term investors are advised to consider holding the stock for potential returns. Analysts recommend maintaining a stop loss around Rs 350 to manage risks effectively.