Lenskart Solutions IPO review

•    The company is a leading prescription based eyewear manufacturer in India.
•    It marked constant growth in its top and bottom lines for the reported periods and has turned the corner from FY25.
•    It has planned to set up most modern and higher capacity manufacturing unit in Telangana.
•    Based on its recent financial data, the issue appears exorbitantly priced.
•    The company is asking fancy premium for its aggressive future plans.
•    Only well-informed/cash surplus/risk seekers may park funds for medium to long term.

ABOUT COMPANY:
Lenskart Solutions Ltd. (LSL) commenced its operations in India as an online business in 2010 and opened first retail store in New Delhi in 2013. Since then, it has scaled through both the online and offline channels and have established a presence through its retail stores, websites, mobile applications, and other channels. During the three months ended June 30, 2025 and the Financial Year 2025, in India, 3.73 million and 9.94 million customer accounts, respectively, transacted with it, and the company sold 6.72 million and 22.91 million units of eyewear, respectively. 

As of June 30, 2025, it had 2137 stores in India, of which, 1831 were owned and 306 were franchisee-owned. During the three months ended June 30, 2025 and the Financial Year 2025, its India segment total revenue as per Ind AS 108 amounted to Rs. 1169.18 cr. and Rs. 4060.47 cr., respectively, and India segment results pre-depreciation and amortization amounted to Rs. 228.08 cr., and Rs. 489.48 cr., respectively, reflecting an India segment total revenue as per Ind AS 108 CAGR of 30.29% and an India segment results pre-depreciation and amortization CAGR of 111.67% between Financial Years 2023 and 2025. LSL is India’s largest and fastest-growing eyewear company in terms of revenue from operations for the Financial Years 2025, 2024 and 2023, according to the Redseer Report.

The clear vision is fundamental to the personal development and well-being of an individual, and its aim is to build tech-enabled supply and distribution solutions that improve access to affordable and quality ‘Eyewear for All’. LSL is a technology-driven eyewear company with integrated operations spanning designing, manufacturing, branding and retailing of eyewear products. It primarily sells prescription eyeglasses, sunglasses, and other products such as contact lenses and eyewear accessories. India is its largest market, and according to the Redseer Report, it is the largest seller of prescription eyeglasses in terms of volumes sold in India in Financial Year 2025, among organized retailers. Leveraging its experience and capabilities in India, it has expanded into select international markets including Japan, Southeast Asia and the Middle East. LSL is India’s largest, and in Asia, are amongst the two largest, organized retailers of prescription eyeglasses in terms of B2C eyeglasses sales volumes during the Financial Year 2025, according to the Redseer Report.

It is a direct-to-consumer company that designs and sells a wide range of eyewear products under own brands and sub-brands. It designs eyeglasses, both frames and lenses, supported by its 109-member design and merchandising team, as of June 30, 2025. The company offers products across a wide range of price points and age categories, catering to the requirements of an entire household. During the three months ended June 30, 2025 and the Financial Year 2025, it launched 42 and 105 new in-house designed and engineered collections globally, respectively, including in collaboration with popular brands and celebrities. The two years purchase frequency among new customer accounts acquired by it in the Financial Year 2023 was 3.62 eyeglasses as compared to an India average of 1.8 eyeglasses, according to the Redseer Report.

Its brands are designed to be aspirational and appeal to a wide range of customer categories. In the Financial Year 2025, Lenskart was awarded “India’s Most Trusted Eyewear Brand of 2025” by TRA Research. It offers customers a convenient purchase journey through its omnichannel retail network. As of June 30, 2025, its mobile applications had over 100 million cumulative downloads and the company operated its business through 2806 stores globally (comprising 2137 stores in India and 669 stores internationally). According to the Redseer Report, the value chain for prescription eyeglasses is complex, involving high degree of precision and accuracy to create a made-to-order product for every customer. In order to provide a satisfactory customer experience, it has made a strategic choice to centralize and control the entire prescription eyeglasses supply chain, comprising lens manufacturing, lens edging, lens design, frame design, frame manufacturing and delivery. It owns and operates frame and lens design and prescription eyeglasses manufacturing facilities at two locations in India in Bhiwadi, Rajasthan and Gurugram, Haryana, supplemented by regional facilities in Singapore and the United Arab Emirates. 

This centralized manufacturing and controlled supply chain in India has allowed it to deliver quality prescription eyeglasses at affordable costs and enable next day delivery at select locations. This integrated approach also allows it to adapt offerings based on customer feedback. According to the Redseer Report, its Bhiwadi facility in India is amongst the top two vertically integrated centralized manufacturing facility for prescription eyeglasses globally in terms of manufacturing capacity for the Financial Year 2025.

According to the Redseer Report, in the Financial Year 2025, Asia accounts for the largest share of global population with refractive error incidences with Southeast Asia and Japan having an incidence rate of approximately 65% and 68%, respectively, which is expected to increase to 70% and 71%, respectively, by the Financial Year 2030, indicating increasing demand for vision correction solutions across the region. Additionally, according to the Redseer Report, the penetration of prescription eyeglasses in Asia is low with Southeast Asia at 40%, Middle East at 60%, and Japan at 69%, as compared to the United States at 88%. The number of individuals affected by refractive errors in India has increased from approximately 43% (approximately 590 million) in the Fiscal 2020 to approximately 53% (approximately 777 million) in the Fiscal 2025 and is projected to increase to approximately 62% (approximately 943 million) by the Financial Year 2030, according to the Redseer Report. To address this growing problem, it has deepened geographic penetration and its omnichannel presence in India, enabled by 358 home try-on agents as of June 30, 2025, and the addition of 1280 new stores between the Financial Year 2023 and June 30, 2025, with 64.38% of such stores located outside metropolitan cities in India.

As of June 30, 2025, it offered complementary eye tests across our 2806 stores in Indian and international markets. During the three months ended June 30, 2025 and the Financial Year 2025, the company conducted approximately 4.43 million and 13.45 million eye tests, respectively, in India and 0.68 million and 2.56 million eye tests, respectively, outside India. According to the Redseer Report, this was the highest number of eye tests among leading large, organized prescription eyeglasses retailers in India in such year/period. Prescription eyeglasses represented more than 80% of its revenue from operations, on a restated basis, during each of the Financial Years 2025, 2024 and 2023. As of June 30, 2025, it had 18173 employees on its payroll (including 35.82% female employees).

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route combo IPO of 181045160 equity shares of Rs. 2 each (worth Rs. 7278.02 cr. at the upper cap), The issue comprises of Offer for Sale (OFS) of 127562573 equity shares (worth Rs. 5128.02 cr. at the upper cap), and fresh equity shares issue worth Rs. 2150 cr. (approx. 53482587 equity shares at the upper cap). The company has announced a price band of Rs. 382 – Rs. 402 per equity shares of Rs. 2 each. The issue opens for subscription on October 31, 2025, and will close on November 04, 2025. The minimum application to be made is for 37 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE and NSE. The issue constitutes 10.44% of the post-IPO paid-up equity capital. From the net proceeds of the fresh equity issue, the company will utilize Rs. 272.62 cr. for capex on CoCo stores, Rs. 591.44 cr. for expenses on CoCo stores, 213.38 cr. for investment in technology and cloud infra., Rs. 320.06 cr. for brand marketing and business promotion, and the rest for unidentified inorganic acquisitions, and general corporate purposes.

The company has reserved equity shares worth Rs. 15 cr. (approx. 373134 equity shares at the upper cap) for its eligible employees, and offering them a discount of Rs. 19 per share. From the rest, it has allocated not less than 75% for QIBs, not more than 15% for HNIs and not more than 35% for Retail investors.

The six Book Running Lead Managers (BRLMs) to this issue are Kotak Mahindra Capital Co. Ltd., Morgan Stanley India Co. Pvt. Ltd., Avendus Capital Pvt. Ltd., Citigroup Global Markets India Pvt. Ltd., Axis Capital Ltd., and Intensive Fiscal Services Pvt. Ltd., while KFin Technologies Ltd., is the registrar to the issue. Spark Institutional Equities Pvt. Ltd., Intensive Softshare Pvt. Ltd., and Kotak Securities Ltd. are the syndicate members.

After having issued initial equity shares at par, the company has issued further equity shares in the price range of Rs. 2.20 – Rs. 4324 per share (based on FV of Rs. 2), between October 2011 and October 2025. It has also issued bonus shares in the ratio of 140 for 1 in November 2012, 1 for 4.81 in November 2014, 1 for 1 in March 2017, 9 for 1 in October 2024. The average cost of acquisition of shares by the promoters/selling stakeholders Rs. 7.60, Rs. 8.11, Rs. 8.16, Rs. 18.60, Rs. 24.14, Rs. 26.77, Rs. 31.54, Rs. 40.90, Rs. 43.12, Rs. 74.26, Rs. 74.99, Rs. 80.53, Rs. 97.75, Rs. 105.92, Rs. 120.00, Rs. 156.27, Rs. 161.28, Rs. 163.64, Rs. 200.81, and Rs. 208.75 per share. 

Post-IPO, its current paid-up equity capital of Rs. 336.28 cr. will stand enhanced to Rs. 346.97 cr. Based on the upper cap of the IPO price band, the company is looking for a market cap of Rs. 69741.25 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted a total income/net profit/ - (loss), of Rs. 3927.97 cr. / Rs. – (63.76) cr. (FY23), Rs. 5609.87 cr. / Rs. – (10.15) cr. (FY24), and Rs. 7009.28 cr. / Rs. 297.34 cr. (FY25). For Q1 of FY26 ended on June 30, 2025, it posted a net profit of Rs. 61.17 cr. on a total income of Rs. 1946.10 cr. The company marked growth in its top lines for the reported periods and has turned the corner from FY25. Higher other income has helped company to post improving performances at the net level despite higher provisions for finance cost, depreciations and employee costs.

For the last three fiscals, the company has posted an average EPS of Rs. 0.78 and an average RoNW of 2.11%. The issue is priced at a P/BV of 10.94 based on its NAV of Rs. 36.74 as of June 30, 2025, and at a P/BV of 8.38 based on its post-IPO NAV of Rs. 48.00 per share (at the upper cap).

If we attribute FY26 annualized earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at P/E of 285.11.  Based on FY25 earnings, the P/E stands at 235.09. Thus, the issue appears exorbitantly priced. 

The company has posted EBITDA (excluding other income and exception item) margins of 6.86% (FY23), 12.38% (FY24), 14.60% (FY25), 17.77% (Q1-FY26), and RoCE margins of – (0.48) %, 5.08%, 13.84%, 3.58% respectively for the reported periods.

DIVIDEND POLICY:
The company has not paid any dividends for the reported periods of the offer document. It has already adopted a dividend policy in May 2025, based on its financial performance and future prospects.

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has no listed peers to compare with.

MERCHANT BANKER’S TRACK RECORD:
The six BRLMs associated with the offer have handled 81 pubic issues in the past three fiscals, out of which 15 issues closed below the offer price on the listing date.