Lenskart will share its debut on Dalal Street tomorrow. What can investors expect?

Eyewear retailer Lenskart Solutions will make its long-awaited stock market debut on Monday, but the euphoria among investors has cooled sharply. After one of the most sought-after consumer launches of 2025, the gray market premium (GMP), a key gauge of stock market expectations, has fallen nearly 94% from Rs 108 to around Rs 6.5 per share, indicating a modest 1.6% premium over the issue price of Rs 402.The sharp decline in GMP suggests that traders in the unofficial market are turning cautious ahead of the listing. Analysts said sentiment has softened due to valuation fatigue and a pullback in secondary markets, even as the public offering drew an overwhelming response.

Strong demand despite valuation concerns

Lenskart’s IPO worth Rs 7,278 crore, one of the largest consumer listings of the year, received bids worth over Rs 1 lakh crore, which translates to a total subscription of 28.3 times. The institutional segment led the rally, with Qualified Institutional Buyers (QIBs) subscribing 45 times, underscoring the strong confidence of both foreign and domestic funds.Non-institutional investors subscribed 18 times, while the retail portion participated 7.5 times, which is impressive given the large ticket size and valuation concerns. Exchange data showed investors bid for shares of Rs 281 crore, while 9.97 crore shares were offered, reflecting robust demand despite a jittery broader market.

Analysts warn: gains on listings could be muted

While analysts remain optimistic about Lenskart’s long-term prospects, many feel that short-term gains from the listing could be limited.

“Lenskart’s valuation appears high and hence listing gains are likely to be muted. However, looking at its robust business model, the company is well positioned to make money in the fast-growing domestic organized eyewear market,” SBI Securities said.

At the higher price point, Lenskart is valued at 10.1x FY25 EV/Sales and 68.7x EV/EBITDA – multiples that leave little room for near-term upside. Still, analysts note that profitability figures have improved, with EBITDA margins rising from 7% in FY23 to 14.7% in FY25. The Street will be keeping a close eye on whether this trajectory maintains the post-listing.

A long-term bet on the Indian eyewear revolution

Behind the valuation chatter lies the growth story that attracted investors. Lenskart has built one of India’s most recognizable consumer brands through its omnichannel model, technology-based design and vertically integrated manufacturing.

The company operates more than 2,700 stores worldwide, including 2,000 in India, and has expanded into Singapore, the UAE and the US. In FY25, revenue rose 32% CAGR over two years to Rs 6,653 crore, while EBITDA grew 3.7 times to Rs 971 crore. It also turned profitable in FY25 with a PAT of Rs 297 crore, a sharp turnaround from a loss of Rs 64 crore two years earlier.

Brokerage Nirmal Bang said Lenskart’s “resilient business model” benefits from its centralized manufacturing and growing international footprint. “Lenskart has strong competitiveness in the Indian eyewear market by leveraging innovation, technology and an omnichannel strategy that keeps it cost-efficient in a fragmented industry,” the brokerage said.

Despite the subdued GMP, analysts say Lenskart will continue to play a role in India’s eyewear revolution in the long term. The debut may not dazzle on day one, but investors will be keeping an eye on whether the company’s execution, and its ability to defend premium valuations, can keep the sparkle alive on Dalal Street.

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(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of the Economic Times)