Lenskart is considering a $10 billion valuation for its upcoming initial public offering (IPO), which is double the size of its previous funding round. The omnichannel eyewear retailer plans to file draft papers in May.
In recent weeks, Chief Executive Peyush Bansal and key investors discussed valuation with the bankers in charge of the $1 billion public offering. However, the plans are contingent on market conditions closer to the IPO's launch.
According to one source, the draft red herring prospectus (DRHP) is expected to be filed by May and listed this year. "Internally, some feel even more aggressive about the valuation, which may not be in sync with the current market.
"Internally, some feel even more aggressive about the valuation, but that may not be in sync with current market conditions and one has to leave money on the table for incoming IPO investors."
"The firm, along with stakeholders, is now ready to go public," said another source, adding that there may not be enough time to complete a pre-listing round. "That's the big change in stance now on the IPO."
Given Lenskart's size and profitability, investors had discussed entering the public markets for the past year, but Bansal had not finalized those plans. Instead, large-scale secondary transactions over the last two years have allowed investors to part-sell stakes for liquidity.
Lenskart closed a $200 million secondary round in June last year at a valuation of $5 billion, following a $4.5 billion primary round. Secondaries are typically sold at a discount, but Lenskart shares have been in high demand from both new and existing investors.
An investor in the company added, "There's always more demand to buy than sell."
Several late-stage startups are preparing to sell shares in FY26, demonstrating their popularity among public market investors, both retail and institutional.
Lenskart, backed by SoftBank and Temasek, is the clear market leader in eyewear, with profitable and expanding operations in India. One of the people mentioned earlier predicted significant growth in Thailand as well as for Owndays, which is part of the premium push.
The eyewear company paid $400 million to acquire the Japanese brand in 2022.
The 15-year-old company, which won first place in the ET Startup Awards last year, now has an annual revenue run rate of $1 billion (Rs 8,400 crore). The company produces 25 million frames and 30-40 million lenses per year.
It also owns a "significant stake" in the Paris-based omnichannel eyewear company Le Petit Lunetier.
Since its inception, Lenskart has raised nearly $2 billion in funding, including secondary sales, in which money does not go to the company but shares are exchanged between new and existing investors.
Prescription for future
Lenskart has been working toward full profitability ahead of the IPO, with a significant reduction in losses and consistent revenue growth.
In FY24, net loss fell to Rs 10 crore from Rs 64 crore in FY23, thanks to technology-driven operational efficiencies. "They (Lenskart) rely and leverage a lot from technology, which leads to operational efficiency in an omnichannel model," said a Bansal associate.
Operating revenue increased 43% year on year to Rs 5,428 crore in FY24. Ebitda more than doubled to Rs 856 crore in FY24, up from Rs 403 crore in FY23.
In an interview last year, Bansal stated that the net promoter score, a key indicator of customer satisfaction, had risen from 65 in recent years to more than 80, indicating the success of its initiatives."Tech is at the heart of everything we do, whether it's improving the customer experience, optimising supply chain, or reducing delivery times," he added.
Lenskart is focusing on local manufacturing while also expanding its retail network.
The majority of manufacturing has been moved to the company's Rajasthan facility. The company will spend $200 million on a new facility in Telangana. This will strengthen its India export business while lowering costs.
While online sales have outpaced offline growth over the last two years, the company intends to add 400 stores to its 2,500-strong brick-and-mortar network.
Joining the club
Several ecommerce, B2B, and fintech startups, among others, have filed this year. Zepto, Groww, Bluestone, PharmEasy, Oyo, Ather Energy, and Zetwerk are among the companies in various stages of IPO preparation, according to reports.
Companies, despite bankers' optimism, will price their offerings in accordance with market conditions at the time of listing, particularly those that have yet to become profitable, as seen last year.
