Shark Tank’s Peyush Bansal, the face of Lenskart, is quite confident that the company's IPO will turn out to be a great investment for the investors. But the question is should investors put their money in? Here’s all the info you need to make a decision before spending your money.
Begin with the basics
- Lenskart’s IPO will be open for subscription from 31 October to 4 November.
- The listing is expected to be 10 November.
- The firm is planning to raise ₹7,278 crore from the market through this offer.
- The price band is between ₹382 and ₹402.
- The lot size is 37 shares; hence, an investment of ₹14,874 is needed to get shares in a primary issue.
How’s the business
Lenskart is undoubtedly the top eyewear seller in India with a network of over 2,800 stores worldwide. In the past two fiscal years, the company’s revenues grew by 32.5 CAGR, and recently, it turned profitable, this is a good sign for any consumer-retail technology brand.
By analyzing the market trends, the experts point out that Lenskart belongs to a rapidly growing industry with an enormous potential of expansion because of its extensively planned new store openings and online-offline integration strategy.
India’s fast-growing eyewear market is where this company is going to reap maximum benefits through its omnichannel operations.
The red flags
Nevertheless, it is far from a perfect picture. The majority of Lenskart’s raw materials are coming from China, which means that the company is exposed to both possible supply chain interruptions and even issues arising from political tensions.
In addition, production is very concentrated in the Gurgaon area, which means that if something happened locally, the company would face operational risks.
On top of these concerns, the Enforcement Directorate (ED) has opened an investigation under the Foreign Exchange Management Act (FEMA) which raises doubts about the company’s compliance and transparency further fueling investor anxiety.
Its valuation is yet another problem that hinders the company's progress. There are many analysts who argue that the IPO of Lenskart looks expensive at a price band of ₹382–₹402, especially when the company’s peers in the consumer and lifestyle sectors are taken into account.
The verdict
The market sentiment is still positive despite these issues. On 29 October, the grey market premium (GMP) was around 27%, indicating strong demand and possible listing profits.
Most of the specialists are of the view that short-term traders may be able to make small profits after the listing; however, Lenskart is a stock that longs should be interested in as it is a company with a promising growth and future market leadership.
