Lenskart makes muted debut, shares open at ₹395
What's the story
Lenskart, the popular eyewear brand, has made a muted market debut today. The company's shares opened at ₹395 on the National Stock Exchange (NSE), a tad lower than its issue price of ₹402. On the Bombay Stock Exchange (BSE), it debuted at ₹390, translating to a discount of 2.98%. The disappointing start comes after Lenskart's gray market premium (GMP) collapsed ahead of listing.
IPO details
Lenskart IPO subscribed over 28 times
Lenskart's ₹7,278-crore initial public offering (IPO) received a strong response from investors during its three-day bidding period from October 31 to November 4. The issue was subscribed over 28 times, showing high demand among institutional and retail investors. The qualified institutional buyers (QIB) category was subscribed 45 times while non-institutional investors subscribed 18.23 times. The retail portion was also in strong demand, being subscribed 7.54 times with the employee quota fully subscribed at 4.96 times.
IPO composition
Fresh issue, OFS in IPO
The IPO consisted of a fresh issue worth ₹2,150 crore and an offer for sale (OFS) of 12.75 crore shares. The price band for the IPO was fixed at ₹382-₹402 per share, valuing the company at around ₹70,000 crore. The funds raised from this exercise will be used to expand retail operations, upgrade technology and boost marketing efforts.
Information
Concerns over high valuation impact listing
Despite the strong response to its IPO, many analysts have expressed concerns over Lenskart's high valuation. The company's price-to-earnings (P/E) ratio and premium pricing were considered expensive compared to peers. These worries, coupled with profit-booking by short-term investors, could have contributed to weak listing performance.
Expert opinions
Long-term growth potential for Lenskart
Market experts believe that a weak listing doesn't necessarily mean poor long-term prospects. The Indian eyewear market continues to grow and Lenskart's strong brand presence, expanding store network, and focus on technology could ensure steady growth over time. However, short-term investors may find limited upside due to high valuations and profit booking post-IPO.