Honasa went up, Lenskart could go either way, says Deepak Shenoy during the recent IPO

The buzz around Lenskart’s recent IPO has sparked sharp reactions and debates among investors and social media users. Deepak Shenoy, CEO of Capitalmind Asset Management, added perspective to the ongoing discussion and shared his views on the drama surrounding an IPO and the unpredictability of market behavior.

Shenoy posted on social media platform

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He compared the IPO of Lenskart with the IPO of Honasa Consumer (Mamaearth), which many people initially doubted, but after the IPO, the shares rose seriously. Shenoy pointed out that markets generally won’t react the way investors want them to, and it’s even more unpredictable in the short term.

Shenoy added: “In general, markets normally won’t react the way you think. In the short term, it’s even more unpredictable.”

Recent buzz

Eyewear retailer Lenskart hit the public markets on Friday with one of the most anticipated IPOs of the year. But while the hype around India’s largest optical retail brand continues to grow, the valuation it commands has raised eyebrows. At the higher end of the price range of Rs 402 per share, the IPO values ​​Lenskart at a price-to-earnings (P/E) multiple of around 235-238 times FY25 earnings, making it one of the most expensive consumer tech listings in India. Lenskart Solutions has raised Rs 3,268.36 crore from 147 investors ahead of its much-awaited IPO, which opened for subscription on October 31 and will close on November 4.

Anchor investors

Of the total allocation, 2.87 crore shares (35.34%) were taken up by 21 domestic mutual funds across 59 schemes, reflecting broad participation from India’s top institutional investors.

Among the domestic anchors, participation came from leading fund houses such as SBI Mutual Fund, HDFC Mutual Fund, ICICI Prudential Mutual Fund, Kotak Mutual Fund, Axis Mutual Fund, Aditya Birla Sun Life Mutual Fund, Mirae Asset, DSP Mutual Fund, Franklin India, HSBC Mutual Fund, WhiteOak Capital, Edelweiss, Bandhan and Canara Robeco.

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Following criticism on social media and several investors discussing the valuations, DSP Mutual Fund has clarified its decision to invest in Lenskart’s IPO.

As far as the valuation of Lenskart’s IPO is concerned, the fund house believes that businesses related to retail and e-commerce are expensive, including this particular business.