After Honasa’s surprise rally, Deepak Shenoy says Lenskart’s IPO could go either way

As Lenskart’s much-anticipated IPO opened for subscription on October 31, the eyewear retailer has become the latest lightning rod for debate in India’s consumer-tech space. With comparisons mounting to Honasa Consumer’s (Mamaearth) post-listing surge, market watchers are divided over whether Lenskart’s high valuation will lead to similar gains — or disappoint expectations.

Amid the excitement, Deepak Shenoy, CEO of Capitalmind Asset Management, added perspective on social media, reminding investors of the market’s unpredictability. “So much drama about an IPO. Last time it was about Honasa, if I recall correctly. That stock went seriously up after the IPO... this time the new stock might go, well, anywhere,” he posted. Shenoy’s remark underscored the uncertainty surrounding Lenskart’s debut — and how short-term market sentiment often defies logic.

Shenoy further noted that “markets are not usually going to respond the way you think,” calling IPO reactions particularly volatile in the short run. His cautionary tone comes as Lenskart’s issue, priced at the upper band of ₹402 per share, draws attention for its steep price-to-earnings (P/E) multiple of 235–238 times FY25 earnings — making it one of India’s costliest consumer-tech listings.

Strong institutional interest

Despite the valuation concerns, the IPO has seen robust participation from institutional investors. Lenskart raised ₹3,268 crore from 147 anchor investors, including 21 domestic mutual funds such as SBI, HDFC, ICICI Prudential, Kotak, Axis, and Aditya Birla Sun Life. This anchor response is being read as a sign of confidence in the company’s brand strength, omnichannel business model, and growth prospects.

However, some analysts warn that Lenskart’s premium pricing leaves limited margin for error. Adjusted for a one-time gain from its acquisition of Owndays, the company’s FY25 net profit stands at just ₹130 crore, translating to a modest 1.96% margin. At a market valuation of nearly ₹70,000 crore, the numbers appear stretched, even for a category leader.

Market reaction

Market veterans and analysts are split on whether the IPO represents opportunity or overreach. Veteran investor Shankar Sharma didn’t mince words, calling India’s IPO scene “the dumbest IPO market,” while noting that criticism of Lenskart’s valuation is inconsistent with how earlier startups like Paytm and Nykaa were priced. “Lenskart is underpricing itself relative to past deals,” Sharma said, adding that the market continues to swing between hype, oversubscription, and post-listing disappointment.

In contrast, brokerage assessments have been cautious to neutral, reflecting valuation worries. Swastika Investmart and Religare Broking have issued neutral ratings, citing that while the company’s fundamentals — brand recall, omni-channel reach, and global expansion — are strong, near-term upside may be capped unless profitability improves.

IPO hype

For retail investors, the Lenskart listing serves as a study in market psychology. Just as Honasa Consumer’s IPO was met with scepticism before surging post-listing, Lenskart’s debut may surprise — but could just as easily underperform. Shenoy’s comment that the stock “could go anywhere” captures that unpredictability perfectly.

Lenskart’s trajectory, experts say, will depend not only on its financials but also on how investors perceive growth in India’s fast-evolving consumer-tech sector. “The market’s mood, not the model, often decides the first few weeks after listing,” Shenoy noted in an earlier commentary.

As the company enters the public markets, Lenskart stands at the intersection of strong institutional backing, lofty valuations, and elevated investor expectations. Whether it mirrors Honasa’s success or becomes a cautionary tale, the IPO’s outcome may shape sentiment for India’s next wave of consumer-tech listings — and test just how unpredictable the markets can be.