Lenskart IPO: Eyewear Giant’s GMP Declines on Final Day; Investor Guidance Needed
Lenskart Solutions, India’s leading eyewear retailer, is nearing the conclusion of its ₹7,278-crore initial public offering (IPO), with strong investor interest evident. As of the second day of bidding, the company has received bids for 20.11 crore shares, significantly surpassing the 9.97 crore shares available, resulting in a total subscription rate of 2.02 times. However, the grey market premium for the IPO has decreased from 21.14% to approximately 14.7%, indicating a potential listing price of around ₹461 per share if current trends persist.
Investor Participation and Subscription Rates
The IPO has attracted considerable attention from various investor categories. Retail Individual Investors have shown robust participation, subscribing 3.33 times the 1.80 crore shares allocated to them. Non-Institutional Investors have also demonstrated strong interest, bidding for 1.89 times the 2.71 crore shares available in their category. Meanwhile, Qualified Institutional Buyers have subscribed 1.64 times the 5.42 crore shares reserved for them, according to data from the Bombay Stock Exchange (BSE). This diverse interest reflects confidence in Lenskart’s market position and growth potential, despite the recent dip in the grey market premium.
Market Sentiment and Analyst Recommendations
Despite the decline in the grey market premium, analysts remain optimistic about Lenskart’s future. Several brokerage firms have issued recommendations for investors to consider holding onto their shares for the long term. SBI Securities has advised a “Subscribe for Long Term” strategy, highlighting Lenskart’s strong market presence and solid business fundamentals. Ventura Securities has echoed this sentiment, describing Lenskart as a forward-thinking company with a tech-enabled model and efficient store economics. They anticipate further profit growth as Lenskart expands its operations and accelerates its international initiatives. Nirmal Bang has also weighed in, suggesting that while the IPO is priced on the higher side, it remains reasonable compared to other modern retail players.
Details of the IPO Offering
Lenskart’s IPO comprises a combination of fresh shares and an offer for sale. The company aims to raise ₹2,150 crore through new shares, while ₹5,128 crore will come from existing shareholders, including major investors like SoftBank, Kedaara Capital, and Temasek. The shares are priced between ₹382 and ₹402 each. At the upper end of this price range, Lenskart is valued at a price-to-earnings ratio of 235 times its FY25 earnings, making this IPO one of the most expensive public listings in the retail sector in recent years. The funds raised from the fresh issue are intended for expansion and growth initiatives, underscoring Lenskart’s commitment to enhancing its market footprint.
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