Lenskart’s Ambitious IPO Plans
Lenskart, a leading eyewear company in India, is gearing up for a significant milestone: its initial public offering (IPO). The company aims to double its valuation to $10 billion ahead of this public offering. This ambitious move comes as Lenskart prepares to submit its draft documentation in May. The IPO is part of a broader trend, with numerous startups in sectors like e-commerce, B2B, and fintech also preparing for public listings this year. Companies such as Zepto, Groww, and PharmEasy are at various stages of their IPO preparations, indicating a vibrant market for new public offerings.
Lenskart’s Growth and Profitability Focus
In recent years, Lenskart has made substantial strides in its growth and profitability. The company has focused on achieving complete profitability as it prepares for its IPO. According to sources, Lenskart’s net loss decreased significantly to Rs 10 crore in FY24, down from Rs 64 crore in FY23. This improvement is attributed to enhanced operational efficiencies driven by technology. The company’s operating revenue surged by 43% year-on-year, reaching Rs 5,428 crore in FY24. Additionally, Lenskart’s EBITDA rose to Rs 856 crore, a notable increase from Rs 403 crore in the previous fiscal year.
Lenskart’s commitment to leveraging technology has played a crucial role in its operational success. The company has adopted an omnichannel model, allowing it to streamline operations and reduce costs. This focus on technology not only enhances customer experience but also positions Lenskart favorably in the competitive eyewear market. As the company prepares for its IPO, it is essential to maintain this momentum and continue delivering value to its customers and investors alike.
Market Conditions and Valuation Strategy
As Lenskart moves closer to its IPO, discussions between CEO Peyush Bansal and principal investors have centered on the company’s valuation for the $1 billion public offering. While there is optimism about Lenskart’s growth trajectory, the final valuation will depend on market conditions at the time of the launch. Sources indicate that there is internal debate about setting an aggressive valuation, but it is crucial to align this with current market dynamics.
The company aims to file its draft red herring prospectus (DRHP) by May, with hopes of getting listed within the calendar year. However, the IPO landscape is complex, and Lenskart must navigate these challenges carefully. Investors are keenly watching how Lenskart will price its offerings, especially given the trend of aligning prices with market conditions, particularly for companies that have yet to achieve profitability.
Future Prospects and Expansion Plans
Lenskart’s future looks promising, with plans for expansion beyond India. The company has already made strides in the eyewear sector, dominating the market with profitable operations. It has also ventured into international markets, including Thailand, and has acquired the Japanese brand Owndays for $400 million. This acquisition is part of Lenskart’s strategy to enhance its premium segment and broaden its product offerings.
With a production capacity of 25 million frames and 30-40 million lenses annually, Lenskart is well-positioned to meet growing consumer demand. The company has raised nearly $2 billion in total funding since its inception, which includes secondary transactions where existing investors sold shares to new investors. This robust financial backing, combined with a strong operational model, sets the stage for Lenskart’s successful IPO and future growth in the eyewear market. As the company prepares for this significant transition, stakeholders remain optimistic about its potential to thrive in the public market.
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