Lenskart GMP crashes to zero, wiping out all pre-listing buzz forward of Monday debut

The gray market premium (GMP) for eyewear retailer Lenskart Options has crashed to zero, wiping out all pre-listing pleasure forward of its market debut on Monday. The GMP, which had peaked at Rs 108, implying an inventory pop of over 25% earlier than the announcement of the IPO, has now collapsed, signalling that the counter might even see a flat or muted itemizing regardless of its wholesome subscription.

Lenskart’s Rs 7,278 crore IPO, comprising a Rs 600 crore contemporary subject and a Rs 6,678 crore supply on the market, was subscribed a good 28 instances total, drawing bids value almost Rs 1 lakh crore. The robust response was pushed by institutional buyers, with the QIB portion subscribed 45 instances, whereas retail and HNI classes had been additionally absolutely booked.

Nevertheless, the Road has grown cautious over valuation issues, an element which will now be weighing on sentiment. On the higher finish of the value band of Rs 402 per share, the IPO valued Lenskart at a steep FY25 EV/EBITDA a number of of over 50x, far greater than established listed friends within the client and retail area.

Including to the strain, brokerage Ambit Capital initiated protection with a “Promote” ranking simply earlier than the itemizing, citing stretched valuations and modest return ratios.

“We count on Lenskart to ship 20% income CAGR over FY25–28 led by India enlargement and rising world scale. Nevertheless, at 55x FY28 EV/EBITDA, the inventory trades at a 15–30% premium to Trent and Nykaa regardless of a decrease RoCE of 9% versus friends’ 35–40%,” Ambit mentioned. It set a goal value of Rs 337, indicating a draw back of about 16% from the difficulty value.

Whereas the corporate has delivered robust topline progress, revenues rose 32.5% to Rs 6,653 crore in FY25, a piece of its Rs 297 crore FY25 revenue got here from a one-time achieve of Rs 167 crore linked to the Owndays acquisition. Adjusted for this, the normalized revenue drops to Rs 130 crore, translating to a web margin of simply 1.96%.Analysts say that whereas Lenskart’s long-term story stays compelling, pushed by its management in India’s underpenetrated eyewear market and omnichannel technique, the inventory’s short-term outlook appears to be like muted.

If the inventory lists flat, it might replicate a cooling of sentiment that had pushed gray market trades to frothy ranges earlier. Lengthy-term buyers, nevertheless, should look to carry, given the corporate’s structural progress potential in India’s increasing eyewear and optical retail market.