Lenskart eyes $10B valuation in IPO, filing expected by May
What's the story
Omnichannel eyewear retailer, Lenskart, is gearing up for its IPO and plans to file draft papers by May. The company is eyeing a $10 billion valuation for its IPO, doubling its worth since the last funding round, the Economic Times reported citing insiders familiar with the matter. CEO Peyush Bansal and key investors have reportedly been discussing this valuation with bankers handling the public offering, which aims to raise $1 billion.
Market influence
Lenskart's IPO plans contingent on market conditions
The decision to go ahead with the IPO will depend on market conditions closer to its launch. "Work is underway to file the draft red herring prospectus (DRHP) by May so it can... get listed this calendar year," an insider told the ET. However, they also noted that some internal voices advocate a higher valuation, but this may not align with current market conditions.
Financial growth
Lenskart's journey to profitability and public listing
Despite investor talks of going public in the last year, Bansal had not confirmed these plans. Instead, major secondary deals in the last two years have enabled investors to partially sell stakes for liquidity. In June last year, Lenskart closed a $200 million secondary round at a $5 billion valuation, after an earlier round of primary capital pumped in at $4.5 billion.
Business expansion
Lenskart's market dominance and expansion plans
Backed by SoftBank and Temasek, Lenskart dominates the eyewear market with profitable and growing operations in India. The company also expects massive growth in Thailand and for Owndays, a Japanese brand it acquired in 2022 for $400 million. Lenskart also owns a major stake in Paris-based omnichannel eyewear brand Le Petit Lunetier.
Revenue growth
Lenskart's financial performance and customer satisfaction
Lenskart has cut down its losses by a huge margin and maintained a steady growth in revenue. In FY24, the company's net loss fell to ₹10 crore from ₹64 crore in FY23, thanks to technology-led operational efficiencies. Operating revenue grew by 43% year-on-year to ₹5,428 crore in FY24. Last year, Bansal had revealed that the net promoter score, a key customer satisfaction metric, jumped from 65 in recent years to over 80.
Strategic moves
Lenskart's focus on local manufacturing and retail expansion
Lenskart is focusing on local manufacturing and expanding its retail network. Most of the production has been shifted to its Rajasthan factory and the company is investing $200 million in a new facility in Telangana. This will help boost its India export business and cut costs. Even though online sales have outpaced offline growth in the last two years, Lenskart plans to add 400 stores to its existing 2,500 brick-and-mortar outlets.