We like their business even though valuations are expensive: DSP Mutual Fund provides clarity on investments in Lenskart’s IPO

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

The fund house posted on social media platform However, given the questions and concerns on social media over the past 24 hours, we felt it was important to share clarity with our investors.”

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In its post, DSP Mutual Fund said the fund house has been selective in participating in IPOs and the discipline will remain unchanged. The fund house also mentioned that it only invests if it has four dimensions.

The four dimensions include: a strong and scalable business, reliable promoters, proven execution and finally valuations.

“It’s rare to find all four perfectly aligned. In the case of Lenskart, we really like the first three,” the fund house further explained about Lenskart’s IPO. On the Lenskart IPO valuation front, the fund house believes that businesses related to retail and e-commerce are expensive, including these specific businesses. According to the fund house, most of its programs do not require cash calls and in this particular case, the fund house has trimmed an amount. slower growing, equally expensive position to make room for this investment.

“When valuations are under pressure, we adjust our positions responsibly. In short, there is nothing new in our approach to evaluating Lenskart,” the fund house said.

The fund house also said it will share more detailed thoughts in the annual letter.

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Lenskart IPO Subscription

India’s largest eyewear retailer Lenskart Solutions on Friday launched its initial public offering worth Rs 7,278 crore for public subscription. The issue was fully subscribed by afternoon with over 10 crore bids received against 9.97 crore shares on offer.

As of 5 pm on day 1, Lenskart’s IPO had been subscribed 1.13 times, cumulative data from the NSE shows. Retail Individual Investors (RIIs) subscribed 1.31 times the 1.80 crore shares allotted to them. Non-institutional investors (NIIs) subscribed to 41% of the Rs 2.71 crore shares on offer.

The IPO will remain open till November 4, with a price range of Rs 382-402 per share. It includes a fresh issue of Rs 2,150 crore and an offer for sale of Rs 5,128 crore by existing investors including SoftBank, Kedaara Capital and Temasek.