It’s India’s hottest IPO but one brokerage says Lenskart could fall 16% from Day 1

Eyewear giant Lenskart, set for one of India’s most closely watched IPO debuts this year, has been hit with a "Sell" rating from Ambit Capital, a rare bearish call just days before its ₹7,278 crore listing on November 11.

Ambit’s sharp downgrade comes despite strong subscription numbers, with the IPO receiving bids worth over ₹1 lakh crore and being subscribed 28 times overall. Institutional investors alone subscribed 45 times. But the brokerage has set a target price of ₹337, implying a 16 percent downside from the IPO’s top-end price of ₹402 per share.

Citing sky-high valuations, Ambit warned that Lenskart’s current pricing leaves “little room for upside” and implies overly optimistic expectations of long-term growth. The grey market premium has also collapsed — from ₹108 at its peak to around ₹15 — pointing to a listing gain of just 3 to 4 percent, a sharp shift from earlier sentiment.

Lenskart, which reported a 32.5 percent revenue CAGR from FY23 to FY25 and turned profitable in FY25 with a net profit of ₹297 crore, has drawn attention for its rapid growth and dominant brand position. But Ambit argues that scaling up a made-to-order eyewear business remains capital-intensive, with free cash flow likely to stay negative until FY28.

The firm is investing ₹2,000 crore over the next three years to expand manufacturing and logistics, with capacity utilisation currently at just 65 percent. Despite a 20 percent revenue growth forecast and margin expansion hopes, Ambit sees downside risk in the company’s implied valuation of 55x FY28 EV/EBITDA — far higher than retail peers like Trent and Nykaa.

“Valuations assume that Lenskart will reach nearly 60 percent of EssilorLuxottica’s global market share in retail — a scenario that seems optimistic,” Ambit stated.

Other brokerages like SBI Securities and Nirmal Bang had issued more optimistic views, advising long-term investors to subscribe citing brand strength, omnichannel reach, and profitability trends. But most acknowledged that near-term listing gains could be limited.

With sentiment turning mixed and the GMP sharply corrected, Lenskart’s market debut is poised to test investor conviction on premium-priced IPOs.