Lenskart stepped into the stock market with confidence. The company asked investors to pay a premium price for its shares. It set the IPO price band between ₹382 and ₹402. This price valued the company at nearly ₹70,000 crore. As a result, analysts, investors, and entrepreneurs watched it closely. Many admired the company’s growth story. However, many also questioned whether the valuation made sense.
This IPO did more than attract financial attention. It opened a debate about how India values its startups. Several young companies now plan to go public. Therefore, the way investors respond to Lenskart’s IPO could influence many other startups. This makes the event important far beyond one company.
How Lenskart Built Its Brand
Lenskart started in 2010 when Peyush Bansal saw a major problem. Millions of people in India needed eyeglasses but struggled to find affordable and stylish options. Traditional optical shops offered limited designs. They also lacked transparency and convenience.
Lenskart offered a new model. It launched an online platform and later built physical stores. This mix of online and offline services helped customers shop comfortably. For example, the company introduced home eye tests and virtual 3D try-on features. People could order glasses after checking how they looked on their face digitally.
Over time, Lenskart expanded across India. It opened more than 2,000 stores. It also entered international markets like Singapore, Dubai, and Saudi Arabia. Meanwhile, it raised investments from major global firms such as SoftBank, KKR, and Temasek.
Although revenue increased each year, profits did not grow at the same pace. Lenskart spent large amounts on marketing, technology, and store expansion. Profitability remained weak for many years. Therefore, when it announced its IPO at a high valuation, skeptics questioned whether earnings supported the price.
IPO Pricing and Mixed Investor Reactions
The IPO valued Lenskart at nearly ₹70,000 crore. Analysts calculated that the company traded at about 230–240 times its expected earnings. This level of pricing surprised many investors. They wanted clear proof that the company could grow profits fast enough to match the price.
Retail investors showed strong interest. They trusted the brand. Many of them had used Lenskart products and believed in its future growth. These investors focused on brand loyalty rather than financial calculations.
On the other hand, several institutional investors stayed cautious. They studied profit margins, growth projections, and competition. Some chose not to invest. They argued that the valuation left no room for error. A few of them stated that global investors would never pay such a high price for a similar business abroad.
Consequently, the IPO attracted strong attention but also raised serious questions. It did not only reflect investor excitement. It also revealed growing concern about the pricing of Indian startups.
Why Investors See Risks
Investors pointed out several reasons for concern. These concerns highlight deeper issues in India’s startup IPO scene.
1. Earnings Do Not Match Valuation
Lenskart reports strong sales numbers. However, revenue alone cannot justify valuation. Investors care about net profit and cash flow. Lenskart only recently reported stable profits, and those profits still remain thin. Therefore, a valuation of ₹70,000 crore appears ambitious. The company must deliver high earnings growth for many years to justify it.
2. Competition Keeps Rising
Lenskart does not dominate the market without challengers. Titan Eye+, Specsmakers, and several local optical chains compete for the same customers. These companies already have strong offline networks. Besides, international eyewear brands plan to enter India soon. This competition could affect Lenskart’s growth and profit margins.
3. High Expectations Increase Pressure
A high IPO price creates pressure. Investors expect strong quarterly results. They also expect consistent growth. If the company fails to meet these expectations even once, the stock price could fall. This pressure can push companies toward risky decisions.
How Other Indian Startup IPOs Performed
Lenskart’s IPO does not stand alone. Several startups have gone public in the past few years. Their performance offers key lessons.
Zomato
Zomato entered the stock market with excitement. It delivered strong listing gains. However, once the hype faded, its losses came under scrutiny. Its stock price later dropped because investors demanded profits, not just user growth.
Paytm
Paytm launched one of India’s largest IPOs. Yet the stock crashed soon after listing. Investors questioned its business model and profitability. Many saw it as an example of overvaluation.
Nykaa
Nykaa performed well on listing day. It had strong brand recognition and profits. However, over time, its stock faced pressure because growth slowed and competition increased.
Policybazaar, Delhivery, Mamaearth
These companies also experienced mixed results. Their IPOs showed strong demand in the beginning. But many of them faced long-term market pressure after listing.
These examples made investors more careful. They do not want to repeat past mistakes. Therefore, when Lenskart priced its shares so high, investors remembered the lessons from earlier startups.
Lenskart’s Strengths in the Market
Despite concerns, Lenskart holds real advantages. These strengths explain why many people still trust its story.
Hybrid Model: Online Plus Offline
Lenskart does not rely only on e-commerce. It runs physical stores in every major Indian city. Customers can try frames in stores and order online. This hybrid system creates convenience and trust.
Strong Brand Recall
Lenskart invests heavily in branding and advertising. People recognise its jingle, advertisements, and celebrity ambassadors. This brand recall gives the company an advantage over smaller competitors.
Technology and Innovation
Lenskart uses technology to improve customer experience. Features like 3D try-on, AI-based frame suggestions, and home eye tests attract modern buyers.
Vertical Integration
The company manufactures its own lenses and frames. It controls much of its supply chain. This helps reduce cost and ensures quality.
Large Market Potential
Millions of Indians need glasses but still do not use them. Demand for eyewear continues to grow. Rising income levels, increased screen exposure, and awareness about eye health create huge opportunities.
So Why Does Worry Still Exist?
The problem does not lie in the business. Instead, it lies in the price investors must pay to own the business. Lenskart has strong fundamentals, but the valuation suggests perfection. It assumes rapid profit growth for many years. If growth slows or competition increases, the price may not hold.
Investors also worry about the message it sends to other startups. If companies keep entering the market with unrealistic valuations, investor trust might decline. Public markets demand discipline, transparency, and accountability. They do not reward hype for long.
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Impact on the Indian Startup Ecosystem
Lenskart’s IPO influences more than its investors. It sets a tone for all upcoming startup listings.
1. More Focus on Profitability
Investors will now pay more attention to profits and cash flow. Startups cannot rely on storytelling. They must show real earnings.
2. Sharper Valuation Discipline
Startups will need to price IPOs more realistically. They must leave room for growth after listing. Otherwise, investors will stay away.
3. Stronger Corporate Governance
Investors expect transparency. They want clear financial reports, responsible leadership, and honest communication.
4. Shift in Investor Sentiment
If Lenskart performs well, investors will gain confidence. If it fails, they may avoid other startup IPOs.
What Lenskart Must Do After Listing
Once the company lists, it must deliver results. It cannot rely on brand value alone. To retain investor trust, it must:
- Increase sales without overspending
- Improve profit margins
- Control costs and reduce cash burn
- Expand stores only when profitable
- Stay transparent in earnings calls
- Maintain strong corporate governance
If Lenskart follows this path, it can justify its valuation and lead India’s startup IPO wave. If it fails, the entire ecosystem may feel the effects.
Possible Future Scenarios
The future can go in different directions.
Scenario 1: Strong Performance
Lenskart grows steadily, increases profits, and manages competition. The stock performs well. Investors gain confidence. More startups come forward with disciplined IPO plans.
Scenario 2: Weak Performance
Growth slows and profit declines. The stock price falls. Retail investors lose trust. Startups delay IPO plans. Investors shift to safer stocks.
Scenario 3: Balanced Outcome
Lenskart delivers moderate results. It manages expectations well. The ecosystem learns to balance growth and profits. This leads to a mature and stable startup market.
Conclusion
The Lenskart IPO became more than a financial event. It became a test of how India values innovation, growth, and profitability. It showed that brand strength and customer love can attract interest. However, it also proved that investors want more than big promises. They want earnings, stability, and long-term discipline.
Lenskart now holds a responsibility. It must perform, not just promise. Its success or failure will guide how investors treat future startups. In short, this IPO marks an important moment in India’s startup journey. It will shape how startups grow, how investors think, and how the market values ambition.
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