Lenskart’s Post-IPO Reality Check: What Its First Week Signals for Startup Listings

Lenskart’s highly anticipated IPO may have dominated headlines at listing, but the story shifted in the first week after the market debut. Initial selling pressure, analyst re-ratings, and a renewed focus on adjusted earnings have turned last week’s narrative – oversubscription and hype – into this week’s reality check for India’s consumer-tech IPO pipeline. Reports documented a subdued listing followed by volatile trading that has left institutional and retail investors asking harder questions.

Week-one market signals: muted debut, quick bounce, persistent questions

Lenskart priced its IPO at ₹402 (price band ₹382–₹402), implying a valuation near ₹69,700–₹70,000 crore at the upper end. The issue was heavily subscribed — overall subscription ran roughly 28×, led by strong QIB interest — yet shares opened 1.7–3% below the issue price on listing day before volatile intraday moves. Those patterns — strong demand in the book but a muted public debut — often signal short-term speculative demand rather than durable conviction.

Trading behaviour in the first week amplified that concern. After listing day weakness, the stock bounced but produced choppy sessions instead of a steady re-rating, suggesting the market is still weighing valuation against fundamentals. Market commentators and broker notes this week have pointed to profit quality and ownership selling as reasons for caution. 

The most consequential reappraisal this week centres on FY25 profitability. Lenskart reported a consolidated net profit of about ₹297 crore for FY25, a sharp swing from prior losses. But analysts highlighted that around ₹167 crore of that figure was a one-time accounting gain related to the Owndays acquisition and other non-operating items—trimming the “normalised” profit to roughly ₹130 crore. That gap matters: headline profits that rely on one-offs do not demonstrate sustainable operating leverage for a capital-intensive retail business. 

“Not a tech company”

Much of the week’s discussion also revived the question of whether consumer brands with digital integrations should be valued like tech companies. Commenting on the distinction, Tejas Khoday, CEO of FYERS, offered a widely shared assessment:

“I want to clarify that Lenskart is not a tech company; it is an eyewear company. It makes and sells eyewear. In its true sense, it is in a traditional industry, so it should be valued as such.”

This view gained further traction as analysts compared Lenskart’s cost structures, manufacturing, store expansion, logistics, and inventory cycles with the scalability and margin profiles of true software or platform businesses. The fundamental point: tech-enabled operations do not automatically translate into tech economics.

What the first-week data implies for upcoming IPOs

Lenskart’s first week is now a real-time case study for other consumer-tech companies in the IPO queue. Here’s how the signal propagates:

• Pricing discipline: Investors will demand clearer paths to recurring operating profits before endorsing tech-style multiples.

• Exit vs. growth: Underwriters and regulators will face more scrutiny if IPOs look like exits for early backers rather than capital raises for growth.

• Retail behaviour: Retail appetite can fuel subscription numbers but may not translate into sustained post-listing gains; future issuers must manage retail messaging carefully.

• Comparable scrutiny: Companies like Firstcry, Ola Electric, Swiggy and others will be compared to Lenskart’s post-listing trajectory — particularly on profit quality and unit economics. 

A lessons investors and founders should take this week

1. Demand recurring profit disclosure: Investors should insist on adjusted EBITDA and recurring profit metrics, with clear reconciliation for one-offs. 

2. Be transparent about selling timelines: markets are sensitive to large pre-IPO stakeholder sales; clear lock-up communication reduces speculation. 

3. Match valuation to economics: retailers should price expectations against comparable retail multiples, not software peers. 

4. Prepare for post-listing narrative management: a coordinated investor relations plan in the first week can stabilise perceptions and counter short-term volatility. 

Market veterans and brokers who tracked the listing highlighted two consistent points: subscription does not equal conviction, and one-time accounting gains deserve close audit scrutiny. As Tejas Khoday warned:

The IPO market is in a frenzy with investors subscribing to stocks with overblown valuations. It's really a time for the market to reflect on its actions. With the success of stocks like Lenskart, being oversubscribed 28 times despite being valued over 230x PE, it sets the wrong tone for future listings. The main problem is that IPO is being used as an exit gate rather than a pathway to a long-term journey which will create wealth for shareholders. If this optimism continues, we could see many more inflated startup investors dump their shares on the public market and ride off into the sunset.

This perspective underscores emerging concerns: subscription does not equal conviction, and one-time accounting gains require far sharper scrutiny when evaluating business fundamentals.

Whether the stock’s early discount reflects a short-term sentiment shift or deeper valuation concerns?

Tejas Khoday explained, “It could be either. It depends on the discount rate and how long the stock will take to list. Usually pre-IPO investors have a short-term horizon of less than 1 year in their minds.” 

Considerations to keep in mind

• Lock-up selling disclosures over the next 2–4 weeks.

• Quarterly operating metrics (gross margin, store economics, inventory days) in the next company update.

• Analyst re-ratings from sell-side brokers that could change target prices.

• Retail investor flow and volume patterns over the next month.

If these indicators show improving operational traction and disciplined selling, the narrative could flip. If they don’t, the IPO may serve as a cautionary benchmark for the next wave of consumer listings. 

A week that matters more than the listing day

Last week’s headlines celebrated subscription rates and branding; this week’s scrutiny is about durable economics. Lenskart’s first week exposed fault lines in profit quality, valuation framing and investor incentives that will shape how India’s consumer-tech IPOs are evaluated going forward. For founders, underwriters and policymakers, the lesson is clear: one-off accounting wins and retail frenzy can create a headline, but steady, repeatable operating performance is what sustains public valuations.