The Indian eyewear brand Lenskart is about to go public and many people online are raising their eyebrows. The company has fixed its IPO price band between ₹382 and ₹402 per share and is targeting a valuation of around ₹69,000-₹70,000 crore (about US $7.9 billion). Netizens are shocked because the valuation works out to over 230–240 times its earnings (P/E) for FY25.
To simplify, investors would be paying ₹235 for every ₹1 the company earned in profit last year. For perspective, that’s the kind of multiple you expect from a fast-scaling tech disruptor, not a retail eyewear brand.
So the big question is – is this huge price tag really justified, or are we seeing a hype-driven listing?
While the majority of Lenskart’s business still comes from India, the company has made a strategic push into the United States. It currently operates physical stores in California, Texas, New York, and New Jersey, with more outlets planned for Chicago, Florida, and the East Coast.
The idea is to attract young working professionals who want fashionable eyewear at accessible prices—an approach that mirrors Warby Parker’s model, but with an Indian supply chain advantage. Lenskart’s early U.S. performance has been modest -it’s building brand awareness and customer trust, not chasing short-term profits. In other words, it’s laying the foundation rather than generating strong financial returns yet.
The Reality Behind FY25 Profits
Lenskart reported a net profit of ₹297 crore in FY25, marking its first profitable year. But that number needs context – it’s not entirely from regular business activities.
Non-Cash Gains Skew the Numbers
Out of the ₹297 crore profit, ₹167.2 crore came from a non-cash gain related to its Owndays acquisition. This gain was a paper adjustment arising from the revaluation of assets after acquiring Owndays. It didn’t come from actual eyewear sales or operations. These kinds of gains can make the income statement look stronger than the underlying business really is.
When you exclude this one-time item, Lenskart’s normalized profit falls to ₹130.1 crore, leaving a thin 1.96% net margin, compared to the reported 4.24%. This means that the bulk of the company’s profits in FY25 were accounting-based, not operational. The timing of such adjustments helped Lenskart report a profit on paper, but they don’t reflect sustainable earnings power.
What Happens If We Only Count Operational Profits?
If investors value Lenskart solely on its operational profit of ₹130.1 crore, the price-to-earnings (P/E) ratio shoots up dramatically – well beyond 500×.
In simpler terms, investors would be paying more than ₹500 for every ₹1 the company actually earns from its core business. That’s an extremely steep multiple even by global growth standards, especially for a retail business with low margins and high competition.
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The Valuation Debate – Paying for “Vision,” Not Value
At a P/E of 235×, Lenskart’s valuation already looks high. But if you only count the normalized profits (excluding accounting gains), the effective P/E skyrockets. This suggests investors are not buying into current performance – they’re paying for the promise of what Lenskart might achieve in the future.
Adding to the concern is the IPO structure itself. Most of the issue is an Offer for Sale (OFS), where existing investors and promoters will sell their shares. That means the company isn’t raising new capital—it’s more of an exit opportunity for early backers at inflated prices.
For U.S. investors familiar with listings like Warby Parker, Allbirds, or even Peloton, this might feel like déjà vu: strong branding, huge ambitions, but weak fundamentals.
The Indian Parallel: Paytm, Nykaa, and Zomato
We’ve seen this play out before in India. IPOs like Paytm, Nykaa, and Zomato all debuted with massive hype and aggressive valuations. But soon after listing, reality set in – their share prices fell sharply once investors realized earnings didn’t match the lofty promises.
Lenskart’s IPO appears to echo that same storyline. It’s a consumer brand with undeniable potential, yet its financials don’t justify the steep valuation it’s seeking. The big question isn’t whether Lenskart has vision – it’s whether that vision is profitable.
Grey Market Premium
According to a recent report by The Economic Times, Lenskart’s IPO is drawing strong interest in the unlisted market. On Day 2, the issue was subscribed 2×, signaling healthy investor appetite. The company’s shares were last quoted with a grey market premium (GMP) of ₹85, suggesting that investors expect a solid debut.
Based on the upper price band of ₹402, this GMP translates to an estimated listing price of around ₹487 per share – an expected gain of roughly 21.14%.
In simple terms, early investors in the grey market are betting that Lenskart will list at a premium despite valuation concerns. However, such optimism could be short-lived if post-listing numbers fail to justify the high price.
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