India’s eyewear giant Lenskart Solutions made its much-anticipated stock market debut on Monday, November 10, 2025, but the results fell dramatically short of expectations.
After raising ₹7,278 crore in what was positioned as one of the year’s hottest IPOs, shares opened at ₹395 on the NSE and ₹390 on the BSE, representing discounts of 1.74% and 2.99% respectively from the issue price of ₹402.
The muted debut came as a shock to retail investors who had poured money into the offering, which received bids worth over ₹1.13 lakh crore and was oversubscribed 28.26 times overall, with qualified institutional buyers alone subscribing 40.35 times.
So what went wrong with what was supposed to be a blockbuster listing?
The Valuation Puzzle That Spooked Markets
At the heart of Lenskart’s disappointing debut lies a fundamental disconnect: sky-high valuations colliding with market reality.
Ambit Capital issued a rare “Sell” rating just days before listing, setting a target price of ₹337 and implying a 16% downside from the IPO price. The brokerage’s concerns centered on the company’s premium pricing, which left little room for upside.
Analysts noted that Lenskart’s valuations of around 10.1 times EV/Sales and 68.7 times EV/EBITDA left minimal space for substantial listing gains. To put this in perspective, the company’s implied valuation of 55 times FY28 EV/EBITDA significantly exceeded retail peers like Trent and Nykaa.
One analyst commentary bluntly stated that the valuations assumed Lenskart would reach nearly 60% of global eyewear giant EssilorLuxottica’s retail market share—an optimistic scenario that many found hard to swallow.
Grey Market Premium: The Canary in the Coal Mine
Perhaps the clearest warning sign came from the grey market, where Lenskart’s premium collapsed spectacularly in the days leading up to listing.
The grey market premium, which had once touched a high of ₹108 per share implying potential listing gains of more than 25%, completely eroded to zero.
This dramatic 90% plunge signaled that traders and investors were backing away from aggressive price expectations.
The steep fall in GMP despite strong IPO subscription of 28.3 times overall showed growing caution among traders about large listing gains.
While the grey market operates outside regulatory oversight and isn’t always accurate, such a dramatic reversal in sentiment proved prescient in Lenskart’s case.
Strong Business, Challenging Economics
Lenskart’s fundamentals tell a story of impressive growth but concerning profitability dynamics.
The company reported revenues of ₹66,525.17 million in FY 2025, with revenue increasing by 25% and profit after tax rising by 3,028% between FY24 and FY25. However, this profitability picture requires context.
The company’s reported profit includes significant one-time gains, particularly from the Owndays acquisition. When normalized, the net margin appears more modest.
Ambit argued that scaling up a made-to-order eyewear business remains capital-intensive, with free cash flow likely to stay negative until FY28, as the firm plans to invest ₹2,000 crore over the next three years to expand manufacturing and logistics.
Additionally, the company’s manufacturing facilities operated at just 55.10% capacity utilization as of June 2025, and raw materials constituted 24.52% of total expenses in FY25, making profitability sensitive to commodity price fluctuations.
Market Timing and IPO Fatigue
Lenskart’s listing came at a challenging moment for Indian markets. The benchmark Nifty index capped its second straight weekly drop on Friday before Lenskart’s Monday debut, with valuations remaining stretched and sentiment cautious.
The broader market context of IPO fatigue couldn’t be ignored—investors had witnessed several high-profile debuts delivering muted or negative returns despite initial hype.
The IPO sparked public debate about whether Indian startups were being valued too richly as they went public, with DSP Asset Managers publicly defending its anchor investment after facing social media criticism, conceding the deal was “expensive” despite strong fundamentals.
What Analysts Are Saying Now
Following the weak debut, market experts are divided on Lenskart’s prospects. Shivani Nyati, head of wealth at Swastika Investmart, suggested that investors allotted shares may consider holding for the medium to long term, supported by earnings visibility and expanding store footprint, with a stop loss around ₹350, while short-term traders should exit and look for better opportunities.
The bull case focuses on Lenskart’s dominant position in India’s organized eyewear market, its omnichannel model combining 2,137 domestic stores with over 100 million app downloads, and expansion into international markets including Japan, Southeast Asia, and the Middle East.
The company’s vertically integrated manufacturing gives it cost advantages and faster delivery capabilities than competitors.
The Bigger Picture: Lessons for Investors
Lenskart’s subdued listing offers important lessons for IPO investors. Strong subscription numbers don’t guarantee strong listings—fundamentals and valuations ultimately matter more than hype.
The sharp reversal in grey market premium served as an accurate predictor of listing performance, suggesting that sentiment indicators shouldn’t be ignored even when subscription figures look impressive.
The gap between expectations and reality highlights growing sophistication among public market investors who are scrutinizing growth companies more carefully.
While Lenskart’s business model and market position remain strong, the company will need to demonstrate consistent profitability improvement and justify its premium valuation through execution in coming quarters.
For now, the “blockbuster” IPO that was supposed to set markets ablaze has instead become a cautionary tale about the perils of excessive valuations, reminding investors that even category leaders with genuine growth stories can disappoint when priced for perfection.
Whether Lenskart can reverse this narrative and reward long-term shareholders remains to be seen, but its debut serves as a sobering reminder that in the stock market, price is what you pay, and value is what you get—and sometimes, the two don’t align.
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