Lenskart IPO Opens: Should You Apply? Check Issue And Other Key Details —Read HDFC Securities Report

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HDFC Securities Retail Research

Lenskart Solutions Ltd. launched its initial public offering today and will conclude on Nov. 04. A technology-driven eyewear company has fixed the price band in the range of Rs 382 and Rs 402 per equity share (Discount of Rs 19 for all eligible employees).

Investors can place bids starting from a minimum of 37 shares and in multiples thereafter.

The Rs 7,278-crore IPO comprises of fresh issue of Rs 2,150 crore and Rs 5,128 crore through an offer-for-sale.

Kotak Mahindra Capital Company Ltd., Morgan Stanley India Company Private Ltd., Avendus Capital Pvt Ltd., Citigroup Global Markets India Pvt Ltd., Axis Capital Ltd., Intensive Fiscal Services Pvt Ltd. are the book running lead manager for the public issue while MUFG Intime India Pvt Ltd. is the registrar to the offer.

The shares of Lenskart will be listed on both the National Stock Exchange and the BSE.

Objects of Issue:

Offer for Sale

The Selling Shareholders will be entitled to their respective portion of the proceeds of the Offer for Sale after deducting their respective proportion of Offer expenses and relevant taxes thereon in accordance with the Offer Agreement.

The Company will not receive any proceeds from the Offer for Sale and the proceeds received from the Offer for Sale will not form part of the Net Proceeds.

Fresh Issue

Proposed schedule of implementation and deployment of Net Proceeds. Lenskart propose to utilize the Net Proceeds in the manner set forth in-

1. Capital expenditure towards set-up of new CoCo stores in India,

2. Expenditure for lease/rent/license agreements related payments for its CoCo stores operated by the Company, in India,

3. Investing in technology and cloud infrastructure,

4. Brand marketing and business promotion expenses for enhancing brand awareness,

5. Unidentified inorganic acquisitions and general corporate purposes.

Competitive Strengths

• Centralized Supply Chain and Manufacturing Processes.

• Frame and Lens Engineering and Manufacturing Capabilities.

• Direct-to-consumer model.

• Customer-Focused Product Design Capabilities.

• Lenskart Brand and Portfolio of Owned Sub-brands.

• Technology First Approach to Customer Experience and Operational Efficiency.

• Omnichannel Retail Network.

• Culture and Value.

• Category Leadership, Scale, and Track Record of Revenue and Ebitda Growth.

Key Concerns

• Raw materials consumed were Rs 4,673 million (25.45% of expenses) in Q1 FY26 and Rs 16,230 million (24.52%) in FY25. Supply interruptions, price fluctuations, or quality issues from key suppliers could disrupt manufacturing and hurt margins.

• Significant imports and manufacturing operations involve China through Baofeng Framekart JV, accounting for 42.21%-54.15% of purchases in recent years. Geopolitical tensions, trade restrictions, or regulatory changes in China could disrupt supply chains or increase costs.

• Manufacturing capacity utilization was 55.10% in Q1 FY26 and about 48% in FY25. Failure to maintain or improve utilization could reduce profitability.

• The Directorate of Enforcement inquiry into procedural delays under FEMA presents potential for penalties or reputational harm, including challenges in obtaining overseas investment approvals.

• Manufacturing facilities face significant environmental, health, and safety regulatory compliance requirements. Non-compliance could lead to penalties or operational disruptions.

• Risks from breakdowns, accidents, labour disputes, cyberattacks, or natural disasters in facilities in India, Singapore, UAE, and China may affect production volumes and delivery timelines.

• Heavy dependence on Gurugram industrial cluster for lens manufacturing concentrates operational risks, with disruptions potentially delaying order fulfilments and impacting customer satisfaction.

• Construction of a Rs.15,000 million greenfield manufacturing facility in Telangana may face delays or regulatory hurdles affecting future capacity expansion.

• As of June 30, 2025, 2,806 stores operated globally with 2,137 in India. Challenges securing leases, changing demographics, and economic fluctuations could affect profitability of retail stores.

• Operating in 14 countries introduces risks from political instability, foreign exchange volatility, legal differences, and compliance challenges.

• Franchise Operations: 22% of stores are franchise-operated with limited operational control leading to potential inconsistent service standards or brand damage.

• The business depends heavily on Promoters and senior management. Loss or inability to attract replacements could impact operations and strategic direction.

• Factors like geopolitical conflicts, pandemics, inflation, tax reforms, or rating downgrades could affect consumer spending or operating conditions.

• Weather events, trade restrictions, geopolitical tensions (e.g., Taiwan-China) may interrupt supplies and operations, affecting costs and fulfillment.

• Reliance on search engines and app marketplaces is subject to algorithm or policy changes that could reduce customer acquisition efficacy.

• Incorrect forecasting or supply fluctuations may cause overstocking or shortages, impacting capital and customer service.

• 242 trademarks registered but brand and product counterfeit risk remains, potentially affecting revenue and reputation.

• Warranty claims could increase with sales volume; lack of insurance for product liability could affect profitability.

• Potential risks in operational and financial controls could lead to fraud or reporting errors impacting reputation.

• Failure to comply with anti-corruption and sanctions laws in multiple jurisdictions could cause penalties or reputational damage.

• Non-compliance with increasingly strict data protection laws (e.g., India’s PDP Act 2023) could lead to legal actions and loss of trust.

• Increasing sophistication of cyber-attacks and data breaches pose risks of revenue loss, reputational harm and regulatory penalties.

• Insurance excludes certain risks and coverage limits may be insufficient to cover losses fully.

• Expansions or new machinery are capital intensive; inability to optimise capacity leads to higher costs or lost revenue.

• Difficulties in opening new stores or renewing leases could impede growth. Store closures due to mall shutdowns or franchise issues add risks.

• Rising marketing expenses (Rs.1,276 million in Q1 FY26, 6.74% of revenue) face efficiency risks from increased competition and changing digital algorithms.

• Maintaining price levels amid competitive discounting impacts margins; shifts in product mix may reduce average selling prices

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