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Lenskart IPO GMP- Market experts say that the fundamentals of Lenskart Solutions are strong, but the valuation is expensive. This is the reason why investors should not expect much listing gain from Lenskart IPO.
New Delhi. Lenskart IPO is going to be listed in the stock market next week. There was tremendous enthusiasm among investors regarding this IPO and it was subscribed 28.3 times. But, just before the listing, the enthusiasm of investors has been cooled by the crashed gray market price of Lenskart IPO. Till a few days ago, the gray market premium (GMP) of Lenskart shares was ₹ 108, now it has fallen to ₹ 10 (Lenskart IPO GMP). This means that the shares in the issue can be listed at only 2.5 percent premium.
This sharp decline in GMP of Lenskart IPO clearly shows that traders in the unofficial market have now become cautious about the listing of the company. Market experts believe that high valuations and weak secondary market sentiment have dampened the spirits of investors. Many brokerage firms have said that despite strong fundamentals, valuations are quite high and that is why listing gains may not be very high.
Don’t expect much listing gain
According to an Economic Times report, SBI Securities said in its report that Lenskart’s valuation at the upper price band is 10.1 times on FY25 EV/Sales basis and 68.7 times on EV/EBITDA basis, which reduces the scope for short-term upside. “Listing gains are likely to be limited. But its strong business model and strong foothold in the growing organized eyewear market will strengthen the company in the long run,” the brokerage said. The profitability of the company is improving. EBITDA margin was 7% in FY23, which has increased to 14.7% in FY25. This trend will remain in the eyes of investors.
Preparing for a long journey in the eye wear market
Lenskart has made its mark as a company that makes best use of retail, technology and omnichannel models. The company currently has more than 2,700 stores worldwide, of which 2,000 are in India. The company’s presence is also getting stronger in markets like Singapore, UAE and America. The company’s revenue grew at 32% CAGR in the last two years and revenue reached ₹6,653 crore in FY25. EBITDA also increased by 3.7 times to ₹971 crore. While two years ago the company was incurring a loss of ₹64 crore, in FY25 the company recorded a net profit of ₹297 crore.
