“The surprise is that despite 20x subscription, the listing failed to take off. Valuations were already stretched,” Kant told ET Now.
Valuations far too high, warns Kant
Kant noted that while Lenskart is a strong brand with sound management and a dominant market share, its current valuation leaves little room for upside.
“It’s a 15–20-year-old company with only 4–5% of market share. Even with a 20% revenue growth and 15% margins, FY30 PAT would be around ₹1,000 crore — implying a forward P/E of nearly 70x,” he said.
At this level, he believes the stock remains overvalued and has issued an “Avoid” rating.
Strong business weak pricing: The IPO paradox
Drawing parallels with other high-profile listings, Kant said “good businesses can fail due to bad pricing.”“There’s nothing wrong with Lenskart’s business or management — the only problem is valuation. Even Nykaa, after four years, trades 40–45% below its peak despite being a good business,” he pointed out.He added that IPOs like LG Electronics India and Hyundai showed how “leaving money on the table” helps sustain investor confidence — something missing in recent IPOs.
Competition from Jio Frames could pressure growth
Kant warned that the entry of Reliance’s Jio Frames could disrupt the eyewear market in the coming years.
“Reliance is a mass-market disruptor. Once Jio Frames launches, it will challenge Lenskart’s pricing power,” he said.
Even if the stock corrects by 50%, Kant says it still won’t be an immediate buy, citing the need to reassess growth once competition intensifies.
IPO valuations need a reality check
Kant believes the broader IPO market has tilted too far toward aggressive pricing, leaving little value for retail investors.
“For the IPO market to remain healthy, issuers must price offerings sensibly. Investors need to see value on listing day, not just hype,” he said.