Lenskart sharpens focus on IPO at $10 billion valuation

Lenskart is contemplating a possible $10-billion valuation, double that of its final funding spherical, for its upcoming preliminary public providing (IPO), in response to individuals briefed on the matter. The omnichannel eyewear retailer has set its sights on submitting draft papers in Could, they stated.

Chief govt Peyush Bansal and key buyers, in current weeks, mentioned valuation with the bankers managing the $1-billion public providing. The plans are, nevertheless, contingent on market situations nearer to the launch of the IPO.

“Work is underway to file the draft crimson herring prospectus (DRHP) by Could so it might probably… get listed this calendar yr,” stated one of many individuals cited. “Internally, some really feel much more aggressive in regards to the valuation, however that is probably not in sync with present market situations and one has to go away cash on the desk for incoming IPO buyers.”

Bansal didn’t reply to ET’s queries.

“The agency, together with stakeholders, is now able to go public,” stated one other particular person, including that there is probably not time left to shut a pre-listing spherical. “That’s the massive change in stance now on the IPO.”

Given Lenskart’s scale and profitability, buyers had been discussing tapping the general public markets during the last yr, however Bansal had not finalised these plans. As an alternative, big-ticket secondary offers during the last two years enabled buyers to part-sell stakes for liquidity.

Lenskart closed a $200-million secondary spherical in June final yr at a $5-billion valuation, towards a previous spherical of main capital infused at $4.5 billion. Sometimes, secondaries occur at a reduction however Lenskart shares have been in demand amongst new and current buyers.

An investor within the firm additionally stated, “There’s at all times extra demand to purchase than promote.”

A number of late-stage startups are priming themselves for share gross sales in FY26, underscoring their adoption by public market buyers, each retail and institutional.

Backed by SoftBank and Temasek, Lenskart is the eyewear market chief by far, and its India operations are worthwhile and increasing. There would even be main development in Thailand, in addition to for Owndays, a part of the premium push, one of many individuals talked about earlier stated. The eyewear firm acquired the Japanese model in 2022 in a $400-million deal.

The 15-year-old agency—which received high honours at the ET Startup Awards final yr—has hit an annual income run charge of $1 billion (Rs 8,400 crore). The corporate produces 25 million frames and 30-40 million lenses yearly.

It additionally owns a “vital stake” in Paris-based omnichannel eyewear model Le Petit Lunetier.

Since inception, Lenskart has closed almost $2 billion in funding, together with secondary gross sales —the place cash doesn’t go to the corporate with shares altering palms between new and current buyers.

Prescription for future

Lenskart has been working towards full profitability forward of the IPO, with a pointy discount in losses and regular income development.

In FY24, internet loss shrunk to Rs 10 crore, from Rs 64 crore in FY23, on technology-driven operational efficiencies. “They (Lenskart) rely and leverage rather a lot from know-how, which results in operational effectivity in an omnichannel mannequin,” stated an individual who works with Bansal.

Working income rose 43% year-on-year to Rs 5,428 crore in FY24. Ebitda greater than doubled to Rs 856 crore in FY24, from Rs 403 crore in FY23.

In an interview final yr, Bansal stated internet promoter rating, a key indicator of buyer satisfaction, rose from 65 in recent times to over 80, signaling the effectiveness of its initiatives. “Tech is at the guts of all the pieces we do, whether or not it’s enhancing the shopper expertise, optimising provide chain, or lowering supply occasions,” he had stated.

Lenskart is sharpening its focus on native manufacturing and increasing retail community.

A lot of the manufacturing has been shifted to its Rajasthan manufacturing unit. The corporate is spending $200 million on a brand new facility in Telangana. This may strengthen its India export enterprise, lowering prices.

Whereas on-line gross sales have outpaced offline development within the final two years, the corporate plans so as to add 400 shops to its 2,500-strong brick-and-mortar community.

Becoming a member of the membership

A number of ecommerce, business-to-business (B2B) and fintech startups, amongst others, have lined up filings this yr. Zepto, Groww, Bluestone, PharmEasy, Oyo, Ather Power and Zetwerk are amongst these at totally different phases of IPO preparation, as reported by ET.

Corporations, regardless of bullishness from bankers, will value their choices consistent with market situations at time of itemizing, particularly these which can be but to develop into worthwhile, as was seen final yr.