IPO Note : Lenskart Solutions Ltd by Choice Broking Ltd
Salient features of the IPO:
* Lenskart Solutions Ltd. (LSL), Incorporated on May 19, 2008, is a technology-driven eyewear company with integrated operations across design, manufacturing, branding, and retailing of eyewear products. The company primarily offers prescription eyeglasses, sunglasses, contact lenses, and eyewear accessories. Operating through a direct-to-consumer model, LSL designs and sells a diverse range of products under its own brands and sub-brands.
* This public issue is a combination of fresh issue (Rs. 2,150cr) and OFS (Rs. 4,872.89 - 5,128.02cr). The company will not receive any proceeds from the OFS portion. From the fresh issue net proceeds, the company will be utilizing Rs. 272.62cr for capital expenditure towards set-up of new CoCo stores in India, Rs. 591.44cr for Expenditure for lease/rent/license agreements related payments for CoCo stores operated by the Company, in India, Rs. 213.37cr for Investing in technology and cloud infrastructure, and Rs. 320cr for Brand marketing and business promotion expenses for enhancing brand awareness. Residual proceeds will be used for general corporate purposes..
Key competitive strengths:.
* Centralized Supply Chain and Manufacturing Processes
* Frame and Lens Engineering and Manufacturing Capabilities
* Direct-to-consumer model
* Customer-Focused Product Design Capabilities
* Lenskart Brand and Portfolio of Owned Sub-brands
* Omnichannel Retail Network
* Technology First Approach to Customer Experience and Operational Efficiency
Business strategy:
* Increase Markets’ Penetration and, Expand Customer Access Across Channels
* Strengthen Manufacturing and Supply Chain Capabilities
* Continue to Innovate and Expand Product Portfolio
* Invest in New Technologies
* Continue to Enhance Customer Experience
* Continue to strengthen brand across markets
Risk and concerns:
* Depend on eyeware product to lenskart Gold member
* Eyeware industry in India is largely unorganized
* Technology failures can adversely impact business operations
* Competition
Valuation Overview and IPO Rating
At the upper end of its price band, LSL is valued at an EV/Sales of 9.9× (TTM basis), which appears significantly high. While the company has posted steady topline growth, profitability remains weak, with a positive PAT mainly driven by other income and lower expenses. LSL holds a 4–6% market share in the prescription eyewear segment, dominated by unorganized players. Its average revenue per store has improved from Rs. 1.9cr to Rs. 2.4cr, supported by operational efficiencies and AI-driven technologies. Billionaire investor Radhakishan Damani has invested around Rs. 90cr in the company during its pre-IPO funding round. About 40% of its revenue comes from international markets. Given its strong growth potential but high valuation and profitability risks, this offering is best suited for investors with a higher risk appetite and a long-term investment horizon. Thus we assign a “Subscribe for Long Term” rating for this issue.
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SEBI Registration no.: INZ 000160131
