🚀 Lenskart IPO: ₹70,000 Crore Valuation - Magic or Reality?
Piyush Bansal's Lenskart is coming with India's biggest eyewear IPO! The company that made glasses cool is asking for ₹70,000 crores valuation - but is it selling glasses or selling dreams? From Microsoft job to India's #1 eyewear brand, but the real question is: Should you invest your hard-earned money?
Simple Analysis by CA Rahul Malodia - Making Finance Easy for Everyone!
Understanding Lenskart IPO - The Complete Story
Let me tell you this story in the simplest way possible - like I'm explaining to my younger brother!
What Problem Did Lenskart Solve?
In India, 65% of people who needed glasses were NOT wearing them! Why? Three simple reasons:
- They didn't know: People didn't realize their eyesight was weak
- Too expensive: Good glasses cost too much money
- Not cool: Wearing glasses was considered "uncool" - kids used to tease "Are chasmish, kya dekh raha hai?"
Piyush Bansal left his Microsoft job in 2010 and started Lenskart with a simple idea: Make glasses affordable, accessible, and cool!
How Lenskart Changed the Eyewear Game
Made it Affordable: Lenskart gives you quality glasses at lower prices because they do everything themselves - design, manufacture, test, and sell. No middlemen taking extra profits!
Made it Accessible: With 2,700+ stores and online shopping, you can buy glasses from anywhere. Plus, they offer FREE eye checkups - so people discovered they needed glasses and bought them right there!
Made it Cool: Lenskart hired celebrities and created stylish designs. Now people wear glasses even if they don't need them - just to look fashionable! Glasses went from "medical equipment" to "fashion accessory".
| Year | Revenue (₹ Crores) | Profit/Loss (₹ Crores) | What Happened? |
|---|---|---|---|
| 2023 | 3,927 | -63 (Loss) | Growing but losing money |
| 2024 | 5,690 | -1 (Almost no loss) | Sales growing 43%, almost breakeven |
| 2025 | 7,000 | +297 (Profit!) | IPO year - suddenly profitable! 🎩 |
The Magic Trick - How Startups Become Profitable Before IPO
Here's something CA Rahul Malodia wants you to understand - and it's super important!
The Startup Magic: Startups can lose money for years and years. But the moment they plan an IPO (selling shares to public), suddenly they show profits! How? It's like magic... but not the good kind.
In Lenskart's case: Out of ₹297 crores profit, ₹167 crores came from "one-time entries" - meaning it won't happen again next year. Real profit? Only ₹130 crores. But they're showing ₹297 crores to make the company look better!
The Biggest Controversy - Piyush Bansal's Share Game
This is where things get interesting (and a bit tricky):
July 2025: Piyush Bansal owned only 5.17% shares. To file IPO, you need to be a "promoter" (owner with 10%+ shares).
The Move: He took a loan of ₹200 crores and bought shares at ₹52 per share (company valued at ₹8,500 crores). He became a promoter with 10.17% shares.
3 Months Later (IPO): Same shares are now being sold at ₹402 per share (company valued at ₹70,000 crores)! That's 8 times higher in just 3 months!
After IPO: Piyush is selling 2 crore shares and will go back to 8.78% - no longer a promoter! He was NOT a promoter before July, became one for IPO, and won't be one after IPO!
CA Rahul Malodia jokes: "Piyush ji, you sell glasses... but are you also selling caps (fooling people)?"
The Valuation Problem - Is It Too Expensive?
Let me explain this in the simplest way:
What Lenskart is Asking: ₹70,000 crores (10 times their annual sales!)
What Big Companies Get:
| Company | Market Position | Sales Multiple | P/E Ratio |
|---|---|---|---|
| EssilorLuxottica | World's #1 eyewear company | 4x sales | 48 |
| Warby Parker | Similar startup like Lenskart | 3.5x sales | Similar |
| Titan Eyeplus | India's #2 eyewear brand | 5x sales | 80 |
| Lenskart | India's #1 eyewear brand | 10x sales | 235 |
Think About It: The world's biggest eyewear company trades at 48 P/E. Lenskart wants 235 P/E! Even Titan Eyeplus (which is more profitable) has only 80 P/E!
The "Private Lift, Public Drop" Scheme
CA Rahul explains how startup IPOs typically work:
Step 1: Get a good business idea + smart founder
Step 2: Private investors give money at low valuation
Step 3: Company spends heavily on marketing, hiring celebrities, advertising
Step 4: Company loses money but becomes famous
Step 5: Take more money from new investors at higher valuation
Step 6: Repeat until no private investor will pay more
Step 7: Bring IPO! Old investors sell their shares to public at VERY high prices and make huge profits
Step 8: New retail investors (like you and me) buy shares hoping for listing gains, not realizing the valuation is already too high
Who Made Money?
- SoftBank bought at ₹74 → Selling at ₹402 (5.4 times profit)
- Premji Invest bought at ₹24 → Selling at ₹402 (17 times profit!)
- Piyush Bansal bought at ₹52 → Selling at ₹402 (8 times profit in 3 months!)
What's Good About Lenskart? (The Positive Side)
CA Rahul is fair - he shows both sides. Here are Lenskart's real strengths:
1. Amazing Business Model: They do everything - design, manufacture, test, and sell. This means better quality control and lower costs.
2. Brand Power: Everyone knows Lenskart. When you think glasses, you think Lenskart. This "brand recognition" is very valuable.
3. Huge Distribution: 2,700+ stores! Even Titan Eyeplus has only 700 stores. That's 3 times smaller!
4. Cost Control: They have 2 mega factories (Bhiwadi and Gurgaon) where machines do all the work. This means:
- Fast delivery (1-day delivery in 40+ cities!)
- Lower costs (bulk production)
- Good profit margins (70% gross profit!)
5. Market Leader: 25% market share in organized segment - nobody else is even close!
What Are The Risks? (The Problems)
Here's where CA Rahul gets serious. There are BIG risks:
1. Very Low Profit Margin: Only 4.5% net profit margin! (Without that ₹167 crore one-time entry, it's just 2.5%). One small problem and company goes back to losses!
2. High Valuation Risk: They're asking for 5 years of future growth TODAY. If growth slows even a little, share price will crash!
3. Competition Coming: Titan is launching Tata Neu app for online sales. What if Reliance (Ambani) decides to enter eyewear business? Competition can eat into profits quickly!
4. China Dependency: 25%+ raw materials come from China through joint ventures. Any political tension = supply chain problem = business stuck!
5. Expansion Risk: Plan to open 600-700 new stores in 3 years. Finding locations, hiring people, managing inventory - all have execution risks!
6. Not a Necessity: Glasses are NOT like medicines or food. If economy slows and people have less money, they'll delay buying glasses. Sales can drop!
7. ED Inquiry: Enforcement Directorate has already investigated once. While nothing major was found, future inquiries can affect business and share price.
Simple Questions, Simple Answers
CA Rahul Malodia's Final Score: 6 out of 10
Positive Points (+6 marks):
- Excellent business model - Must accept! ✓
- India's #1 brand - Must accept! ✓
- Huge future opportunity - Must accept! ✓
- Company has done great work - Must accept! ✓
Negative Points (-4 marks):
- All 4 marks deducted ONLY for HIGH VALUATION! ✗
The Bottom Line: If this IPO came at ₹35,000-40,000 crore valuation (4 billion dollars instead of 8 billion), it would be an ATTRACTIVE opportunity. CA Rahul would make a positive video and possibly invest himself. But at ₹70,000 crores, all future profits are already taken into today's price!
Who Should Apply? Simple Decision Tree
For Listing Gains (Short-term):
- If you're comfortable with 50-50 chance
- If you'll sell on listing day itself
- If you can handle 20-25% upside OR downside
- Then you can try with small money you can afford to lose
For Long-term Investment:
- NOT RECOMMENDED at current valuation
- Wait for 30-40% correction after listing
- Then consider buying for long term
- Or invest that money in already profitable, fairly valued companies
Think Like This: Imagine you're buying a house. The house is beautiful, location is great, builder is trusted. But they're asking ₹2 crores for a house that should cost ₹1 crore. Would you buy? Same logic applies here!
Final Words of Wisdom
CA Rahul Malodia always reminds us: "Your money, your decision!"
Don't get influenced by YouTube videos (including his!), celebrity endorsements, or market hype. Do your homework:
- Read the RHP (Red Herring Prospectus) document
- Check other analysts' opinions
- Understand your own risk appetite
- Never invest borrowed money in IPOs
- Remember: FOMO (Fear of Missing Out) is your biggest enemy!
The Harsh Truth: Big investors who bought at ₹24, ₹52, ₹74 are selling to you at ₹402. They made 5x to 17x returns. They're not stupid - they know this is the right time to EXIT. You're buying what smart money is selling!
Jai Hind! 🇮🇳
⚠️ Important Disclaimer
CA Rahul Malodia is NOT a SEBI registered research analyst. This is educational content, not investment advice. The views expressed are personal opinions based on publicly available information. Always consult a qualified financial advisor before investing. Stock market investments carry risks - invest only what you can afford to lose!