Eyewear retailer Lenskart Solutions is gearing up to launch its much-anticipated ₹7,278 crore IPO on October 31, sparking a debate on D-Street. While the offering marks one of the year’s biggest listings, analysts are divided: some see it as a milestone for India’s digital-first retail success, while others warn that Lenskart’s steep valuation could limit near-term investor gains.

At an estimated market value of ₹69,726 crore, the Peyush Bansal-led eyewear retailer is asking investors to pay nearly 535 times its normalised earnings, raising concerns about whether the IPO pricing reflects its true financial performance, said an analyst.

“At the proposed valuation, Lenskart is essentially asking investors to pay 535x normalised earnings for a business with thin margins and slowing revenue growth, which has moderated to 17% from 46% in the previous year—a level more typical of mature retail businesses,” said Abhinav Tiwari, Research Analyst at Bonanza.

Lenskart reported healthy growth in its profitability in FY25, with revenue rising from ₹3,788 crore in FY23 to ₹5,428 crore in FY24, and further to ₹6,652 crore in FY25. Profit after tax (PAT) surged to ₹295.6 crore, climbing from a loss of ₹68 crore in FY23 and ₹17.5 crore in FY24. On the operating front, EBITDA jumped nearly four times from ₹263.8 crore in FY23 to ₹975.5 crore in FY25, while margins improved steadily from 7% in FY23 to 14.7% in FY25.

Analysts caution on lofty valuation

While the company has reported a sharp turnaround in profitability for FY25, with PAT margins swinging from -0.18% in FY24 to 4.24%, this surge is largely attributed to a ₹167.2 crore one-time, non-cash gain on deferred consideration related to the acquisition of Japanese eyewear brand Owndays in June 2022. The gain, recorded under “Other Income,” boosted the bottom line but does not reflect operating performance, Tiwari explained.

Excluding this exceptional item, Lenskart’s adjusted net profit drops to ₹130.1 crore on revenue of ₹6,652 crore, resulting in a normalised net margin of just 1.96%, compared with the reported 4.24%.

“A normalised 1.96% net margin on over ₹6,650 crore in revenue is concerning, especially when several smaller peers deliver stronger profitability. The ₹69,726 crore valuation appears difficult to justify against a ₹130 crore normalised profit, implying that much of the optimism is already priced in,” he said.

In Q1FY26, the company’s PAT margin stood at 3.23%, but even this included a ₹5.57 crore fair value through profit or loss (FVTPL) gain. Tiwari said. After adjusting, the underlying PAT comes to ₹55.6 crore on ₹1,940 crore revenue, indicating a modest 2.8% net profit margin, he said, adding that while this shows incremental operational improvement, analysts note that “profitability remains thin relative to the company’s premium IPO valuation”.

“Moreover, by not adjusting for one-time gains, investors are presented with an artificially inflated profit, making the valuation appear less expensive than it truly is,” the analyst at Bonanza said.

Despite a 70% gross margin, in line with global eyewear peers, analysts say the sharp drop to a 2% net margin highlights “inefficient cost scaling and high operating expenses”.

Beyond valuation concerns, additional risks remain, such as the promoters selling ₹1,100 crore worth of shares through the offer for sale (OFS), “suggesting limited near-term confidence and an opportunity to monetise holdings at elevated valuations,” the analyst said. Analysts say this could signal an opportunity for existing shareholders to cash out at peak valuations, rather than a show of long-term confidence.

The three-day IPO, which closes on November 4, comprises a fresh issue of ₹2,150 crore and an OFS of 12.76 crore shares worth ₹5,128.02 crore, according to the company’s draft filing.

Under the OFS, Japanese investor SoftBank, Mumbai-based private equity firm Kedaara Capital, Singapore’s state-owned investor Temasek, Alpha Wave Ventures, and promoters Peyush Bansal, Neha Bansal, Amit Chaudhary, and Sumeet Kapahi plan to offload shares. The promoter group, including co-founders Peyush Bansal, Neha Bansal, Amit Chaudhary, and Sumeet Kapahi, holds a 19.96% stake in the company, with Peyush Bansal alone accounting for about half of it (10.28%). 

Shankar Sharma defends Lenskart

Meanwhile, veteran investor Shankar Sharma has spoken out in support of Lenskart, asserting that the eyewear retailer is being unfairly targeted despite being valued more conservatively than many earlier tech listings.

Taking to X, Sharma wrote, “I don’t wear glasses, but one thing is clear from my lens—there’s a coordinated campaign against Lenskart.”

He added that Lenskart’s valuation appears far more reasonable compared to several startups that went public at much steeper revenue multiples, suggesting the criticism is exaggerated and not entirely justified.

“At 10x sales, it’s a steal compared to P/S valuations of Paytm, Nykaa, Zomato, PB, CarTrade, etc., which IPO’d at 25–50x their revenues (with plenty of losses too),” he wrote on the microblogging site.

Notably, Lenskart’s 47.9x multiple on its Q1FY26 EBITDA run rate puts it at the lower end among high-growth, loss-making peers like Zepto, Paytm, and PB Fintech, though it still trades at a considerable premium compared with established retail businesses.

Despite being a relatively newer player, Lenskart’s EBITDA margin of 18% outpaces traditional retail leaders like Titan (11.5%) and DMart (7.9%), underscoring its strong unit economics and digital-led efficiencies.

“Lenskart’s valuation multiple (47.9x) remains broadly comparable with traditional consumer giants, indicating that investors are already pricing in sustained high growth,” said an industry source.

Ahead of the launch of the IPO, Lenskart shares were commanding a grey market premium (GMP) of ₹63 in the unlisted market, a 15.67% premium over the IPO price of ₹402, indicating a listing price of around ₹465 per share. The Lenskart IPO GMP has dropped from its peak of ₹108 it touched on November 27, the day the company announced the price band for the issue.

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