Lenskart's IPO Fizzles: Shares Dip on Market Debut
Lenskart, India's largest eyewear retailer, faced a lackluster debut on the stock market on November 10, with its shares listing at a discount. The shares were listed at ₹390 on the BSE, which is a drop of 2.99% from the initial public offering (IPO) price of ₹402. On the NSE, the shares debuted at ₹395, reflecting a 1.74% discount. This subdued opening marks the third consecutive IPO in a week that has struggled on Dalal Street.
The disappointing listing was against the backdrop of high expectations set by the grey market premium (GMP), which suggested a 2% rise. The actual GMP was only ₹10, indicating a 2.49% premium. Harshal Dasani from INVAsset PMS noted that while the subscription numbers were impressive, the IPO seemed driven more by market sentiment than solid fundamentals. Investors hoping for quick gains may find their returns muted.
Despite strong demand, with the IPO receiving bids for 281,88,45,629 shares against the 9,97,61,257 shares on offer, the market response was not as anticipated. The IPO was heavily oversubscribed, with a total subscription rate of 28.26 times. The Qualified Institutional Buyers (QIBs) showed the most interest, subscribing 40.35 times, while non-institutional and retail investors subscribed 18.23 and 7.54 times, respectively.
Lenskart aimed for a valuation of ₹69,700 crore at the upper end of the price band, selling shares between ₹382 to ₹402 each. The IPO included a fresh share sale of ₹2,150 crore, alongside an offer for sale of ₹12.75 crore shares by promoters and investors.
The funds raised through this IPO are intended for various strategic initiatives, such as establishing new company-owned stores, technology investments, brand marketing, and potential acquisitions. Founded in 2008, Lenskart has grown to become a major player not only in India but also in international markets across Southeast Asia and the Middle East.
With multiple heavyweight financial firms acting as lead managers for the IPO, the market's response poses questions about investor sentiment in the current economic climate. As Lenskart proceeds with its expansion plans, the initial hiccup in the stock market will be closely watched by analysts and investors alike.
