The much-awaited Lenskart IPO has generated discussions in India’s investment sector, yet there are no apparent indications of people being impressed with the buzz of the eyewear giant in the market. Popular market voice and renowned investor Shankar Sharma, who is the co-founder of First Global and has never met the CEO and founder of Lenskart, Peyush Bansal, recently declared that he is never interested in investing in overvalued companies.

His comment is made in the backdrop of the huge excitement around the upcoming IPO of Lenskart, as it is likely going to be one of the largest new-age technology listings in India in 2025.

Take on Valuations by Shankar Sharma

Shankar Sharma, a market expert with a reputation of being straightforward and data-driven, analyzed the existing trends in valuations of Indian startups negatively. He believes that a number of tech companies in the new age are highly overvalued and that many of them have not shown to be able to be profitable on a consistent basis.

He emphasized that investors need to stick to fundamentals as opposed to hype and said valuation discipline is the initial step to long-term wealth creation.

Sharma was just not very confident about the valuation of companies to be valued at unrealistic multiples before their IPOs, although he did not mention Lenskart in particular, but this had been the case with other tech listings in the recent past.

Lenskart IPO: Buzzes and Investor Interests.

Lenskart is the largest online-to-offline eyewear retailer business based in India, founded by Peyush Bansal in 2010 with the support of international investors, such as SoftBank, Temasek, and Abu Dhabi Investment Authority.

It is estimated that the company will raise more than 6,000 crore through its IPO that will be characterized by a good combination of both offer-for-sale (OFS) and fresh issue. The funds are said to be used to finance growth, technology improvement, and expansion of the supply chain.

However, not all the market veterans are convinced by the excitement, some of whom, including Sharma, assume that Lenskart valuation metrics may be precarious, considering the competitive environment of the eyewear market and a few listed counterparts.

Bigger Critique of Tech IPOs by Sharma.

This is not the first occasion that Shankar Sharma is complaining about bloated valuations. He previously challenged the post-listing performance of tech IPOs like Paytm, Nykaa, and Zomato, which experienced severe corrections following their market functions.

In his view, institutional investors and anchor funds tend to underwrite IPOs at unsustainable prices, which exposes the retail investors to a situation where there is a crash after the hype. This is not the first time we are watching this film, Sharma observed, and it is a suggestion that investors must beware of the big-time marketing efforts.

The approach of Peyush Bansal is staying on track

Conversely, Peyush Bansal still retains the strong brand and customer-focused approach of Lenskart. The multi-channel retail concept adopted by the company (online as well as offline) has helped it serve millions of customers in India as well as in other countries.

The popularity of Bansal as a judge on the Shark Tank India program has only enhanced the image of Lenskart as a household name. Nevertheless, with the IPO approaching, balancing between valuation and performance metrics is aching; analysts in the market believe that  stands as a bigger challenge.

The implication of this for retail investors.

To the retail investors, the Lenskart IPO is accompanied by good and bad news. Although the company has strong market share and brand recall, which makes it a great story, the issue of valuation as raised by some experts, such as Shankar Sharma, presents the essence of due diligence.

Investors should:

• Look at statements and trends of profitability.

• Analyze the valuation multiples of Lenskart against eyewear peers in the world.

• Judge sustainability after IPO, not only listing profits.

Conclusion

Shankar Sharma has made quite straightforward comments, as the Lenskart IPO is close by, as a reminder to the investors not to hold on to the hype. Although Lenskart has developed a great business under the leadership of Peyush Bansal, market players should exercise caution when investing in the company, taking into consideration valuation, fundamentals, and potential in the long term.