IPO closes on 4 Nov'25
Lenskart Solutions Ltd
Minimum Investment
₹ 14,874 / 37 shares
Our Verdict:
Avoid
- Lenskart Solutions Ltd combines a strong business model with a well-established brand and an ambitious expansion plan across India and international markets. While its long-term growth prospects are promising, the IPO is priced at premium valuations that already reflect aggressive assumptions on growth and profitability, leaving little margin for execution errors.
- India’s eyewear market, estimated at Rs 78,800 crore in FY25, is projected to nearly double to Rs 1.48 lakh crore by FY30, implying a robust 13% CAGR. With only a 4–6% share in the organised segment, Lenskart has significant scope for expansion.
- That said, at a valuation of nearly 227x FY25 earnings, the IPO appears stretched. Such pricing implies lofty expectations, making any slowdown in growth or margin pressure a potential risk for post-listing performance. While the company’s long-term story looks promising, near-term upside looks limited unless profitability improves meaningfully.
- Given these factors, the current risk–reward setup appears unfavourable. A more prudent approach would be to wait and evaluate the company’s performance over the next few quarters—especially since recent profits seem inflated by accounting adjustments. FY26 will be pivotal in establishing sustainable earnings. Long-term investors can revisit the stock once valuations moderate and earnings visibility strengthens.
About the company
Founded in
19 May'08
Managing director
Peyush Bansal
- Lenskart Solutions is a technology-driven eyewear company engaged in the design, manufacturing, branding and retailing of prescription eyeglasses, sunglasses, contact lenses and accessories. In FY25, the company manufactured the third-largest number of eyeglasses globally and the largest in India among leading organised retailers.
- The company operates five manufacturing facilities across Bhiwadi (Rajasthan), Gurugram (Haryana), Singapore, Dubai and a joint venture in China, enabling an integrated global supply chain. Its installed capacity expanded from 1.52 crore units in FY23 to 2.75 crore units in FY25. Additionally, a new facility in Hyderabad is under development to further enhance production capacity and localisation.
- As of June 30, 2025, the company had a network of 2,137 stores in India, supported by 669 international stores. The Indian market remains the company’s primary revenue driver, contributing approximately 61% of total revenue in FY25.
STRENGTHS
- Strong Revenue Growth: Lenskart has maintained strong top-line momentum, delivering a revenue CAGR of 32.5% between FY23 and FY25, supported by continued expansion across markets. Revenue further grew 24.6% year-on-year in Q1 FY26, highlighting sustained growth momentum.
- Significant Margin Improvement: EBITDA margin (excluding other income and exceptional items) improved from 6.86% in FY23 to 14.6% in FY25, and further to 17.22% in Q1 FY26—driven by improved cost discipline, operating leverage, and scale efficiencies.
- Strong Store Productivity: Operational performance remained healthy, with FY25 same-store sales growth (SSSG) at 15.7% and same-pincode sales growth (SPSG) at 20.5%. Moreover, about 81% of stores opened in FY23 and FY24 achieved payback by March 31, 2025, with an average payback period of 10.3 months, highlighting efficient capital deployment and store-level profitability.
RISK FACTORS
- Weak Earnings: Lenskart reported losses in FY23 and FY24 and turned profitable in FY25. However, a significant portion of this came from one-time accounting gains rather than core operations. This raises concerns about the sustainability and quality of earnings.
- Dependence on Chinese Imports: About 53% of Lenskart’s raw materials are imported from the People’s Republic of China (PRC), including through Baofeng Framekart Technology Ltd, its joint venture. Any disruption or delay in supplies—especially amid tariff-related or geopolitical uncertainties—could adversely impact business operations and cash flows.
- Underutilised Capacity: Manufacturing facilities in India, Singapore and Dubai have operated at low utilisation levels ranging between 22% and 54%. Persistent underutilisation points to inefficiencies in asset deployment, potentially pressuring margins and profitability.
- Cash Flow Constraints: Lenskart has reported negative cash flows from financing and investing activities in the past. Continued strain on liquidity could limit its ability to fund operations, expansion or debt obligations.
- Legal Risks: Lenskart, along with certain directors, promoters, subsidiaries and key managerial personnel, faces ongoing legal proceedings amounting to Rs 194 crore, including criminal cases. Any adverse verdict could materially affect its financial standing and brand reputation.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 7,278.02 crore
Fresh Issue
₹ 2,150 crore
OFS
₹ 5,128.02 crore
Price range
₹ 382 - 402
Lot size
37 shares
Issue Objective
The net proceeds from the fresh issue will be utilised for the following purposes:
- Setting up new company-owned, company-operated (CoCo) stores across India;
- Meeting expenses related to lease, rent and license agreements for such CoCo stores;
- Investing in technology and cloud infrastructure;
- Undertaking brand marketing and promotional activities to enhance brand visibility; and
- Funding potential inorganic acquisitions and general corporate purposes.
Dates
Bidding open
31 Oct'25
Bidding close
4 Nov'25
Allotment date
6 Nov'25
Refund date
7 Nov'25
Listing
10 Nov'25
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
This document has been issued by Liquide Solutions Private Limited for information purposes only. It does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek personal and independent advice regarding the appropriateness of investing in any of the funds, securities, other investment or investment strategies that may have been discussed or referred herein and should understand that the views regarding future prospects may or may not be realized. In no event shall Liquide Life Private Limited and / or its affiliates or any of their directors, trustees, officers and employees be liable for any direct, indirect, special, incidental or consequential damages arising out of the use of information / opinion herein.