The shares of Lenskart made a weak market debut on November 10, listing at a discount of nearly 3 percent over its IPO price at Rs 390 apiece on BSE.

This comes despite the Rs 7,278-crore IPO seeing strong investor interest during its three days of public bidding, being subscribed more than 28 times its offer size.

Ambit Capital on Lenskart:

Ambit Capital had issued a 'Sell' call on Lenskart shares, even before the stock made its much-anticipated market debut. This is a rare occasion when a brokerage issued a ‘Sell’ call on a stock even before it hit the stock markets.

The brokerage kept a target price of Rs 337 apiece for the shares of the popular eyewear-retailer, implying a downside potential of nearly 14 percent from the stock’s listing price of Rs 390 apiece. Notably, the target price is more than 16 percent lower than its IPO price.

According to the brokerage note cited by NDTV Profit, Ambit Capital said that Lenskart’s made-to-order model is capex-heavy, which keeps returns muted. It expects FCF turning positive only in FY28E.

The domestic brokerage also said that the valuations seem to be unwarranted, given lower RoCE of 9 percent and RoIC of 13 percent, as against peers’ 35-40 percent.

What other analysts say:

"Lenskart looks good from a business model perspective, but at the right valuation which is much lower than the current levels," said Ambareesh Baliga, an independent market analyst. "The (weak) listing shows the importance of looking at the valuation and not to go blindly by grey market premium or oversubscription to apply for an IPO," Baliga said.

Baliga added that this sort of listing, especially after strong subscription, could affect retail investor participation in upcoming IPOs.

Investors allotted shares may consider holding for the medium to long term, supported by earnings visibility and expanding store footprint, with a stop loss around Rs 350 and short-term traders may exit the position and look for better opportunities elsewhere, said Shivani Nyati, Head of Wealth at Swastika Investmart.

Despite a strong subscription of nearly 28 times, the listing fell short of the euphoria seen in other consumer-tech IPOs, underscoring valuation fatigue and a cooling grey-market premium in the days before debut, said Harshal Dasani, Business Head, INVasset PMS.

"At current levels, valuations remain stretched, with the stock trading at a steep multiple relative to both domestic and global peers. Near-term earnings visibility is limited as Lenskart continues to invest heavily in expansion, marketing, and technology integration. Given the combination of rich pricing and moderate listing sentiment, it may be prudent for investors to book profits where available and await more attractive entry points once fundamentals catch up," he said.

"While the company’s long-term story — built around market leadership, omnichannel distribution, and brand strength — remains intact, the short-term setup looks unconvincing. The market’s initial reaction highlights a growing investor preference for profitability and cash flow stability over high-growth narratives. For now, sentiment favors caution rather than conviction," he added.

Lenskart IPO GMP:

The discount listing came despite despite the unlisted shares trading with slight grey market premium (GMP), ahead of listing. The unlisted shares were trading with around 2.5 percent GMP over the IPO price at Rs 412 apiece in the grey market, according to data on Investorgain.

Notably, the GMP quoted by the site has significantly fallen from the 24 percent quoted on the IPO opened for public bidding (October 31), and 27 percent quoted earlier during that month.

About Lenskart IPO:

Lenskart had launched its IPO to raise Rs 7,278 crore through a fresh issue of shares worth Rs 2,150 crore, and an offer for sale of 12.75 crore shares. At a price band of Rs 382-402 per share, the company seeks a valuation of around Rs 70,000 crore.

Investors could bid for a minimum of 37 shares, requiring an investment of Rs 14,874, and in multiples thereafter.

Valuation concerns:

Several analysts have noted that the company is seeking a significantly high valuation, which implies a profit to earnings (P/E) ratio of 230. Lenskart CEO Peyush Bansal was asked during an interview with CNBC-TV18 about the company's valuation. Even if the company triples its profits over the new few years, it will still have a P/E ratio of 70, which is still considered to be expensive, the news channel said, while asking how much value was left for the investors aiming to invest in the company now.

Bansal highlighted the company's 90 percent EBITDA CAGR and the long-term growth potential of the eyewear market.

"As a company and as an entrepreneur, our job is to create value for the customer. Yeah, right now, increasingly for the shareholder as well. And as far as valuation is concerned, it's what the market decides," he told CNBC-TV18.