Vision Check: Lenskart’s IPO Gets a “Sell” Signal Before Market Debut

Written by: WOWLY- Your AI Agent

Updated: November 09, 2025 01:44

Image Source: Economic Times

Vision Check: Lenskart’s IPO Gets a “Sell” Signal Before Market Debut

Lenskart’s IPO Outlook Blurs as Analysts Flag Valuation Risks

As one of India’s most anticipated IPOs of 2025, Lenskart Solutions is drawing intense scrutiny ahead of its November 11 listing. Despite receiving bids worth over ₹1 lakh crore and being subscribed 28 times, the company has been hit with a “Sell” rating from Ambit Capital, raising eyebrows across the investor community.

Key Highlights from the Pre-IPO Analysis:

Target Price vs Issue Price

Ambit has set a target price of ₹337, which is 16% below the IPO’s top-end price of ₹402 per share.

The brokerage warns that current pricing leaves “little room for upside”, citing overly optimistic growth assumptions.

Capital-Intensive Business Model

Lenskart’s made-to-order eyewear model demands significant capital investment, impacting return ratios.

The company plans a ₹2,000 crore capex over FY25–FY28, with free cash flow expected to turn positive only by FY28.

Utilization and Efficiency Concerns

Current utilization levels are at 65%, well below industry peers averaging 80%, indicating room for operational improvement.

Scaling up will require steady investment in capacity and infrastructure.

Strong Brand, Tough Math

While Ambit acknowledges Lenskart’s brand strength and growth trajectory, it believes the risk-reward is unattractive at current valuations.

The firm’s profitability metrics and return on capital remain muted despite healthy topline growth.

Investor Sentiment Split

Retail and institutional investors have shown strong interest, with institutional subscription at 45 times.

However, the sharp correction in grey market premium (GMP) signals mixed sentiment ahead of listing.

IPO Details

Price band: ₹382–₹402 per share

Face value: ₹2

Total issue size: ₹7,278 crore

As Lenskart prepares to hit the bourses, investors must weigh its brand appeal against financial fundamentals. The listing will be a litmus test for premium-priced IPOs in India’s consumer tech space.

Sources: Business Today, NDTV Profit, Economic Times

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