The 'Shark Tank' Valuation Report: Zomato, Lenskart, Mamaearth, Emcure — Who Gets The Deal?

Quant Mutual Fund's Sandeep Tandon has equated the ongoing IPO fervour in primary markets to 'stupidity', arguing that global investors would scoff at the valuations some of the new issues are getting subscribed for. The comments came just days before Lenskart's much-awaited issue opens for subscription and amid concerns over its valuations.

In hindsight, though, the IPO frenzy in primary markets could also be an indicator of India's growing appetite for new-age businesses, a sector that is now increasingly being defined by some of the market's most recognisable faces: The Shark Tank judges.

Let's talk about Exhibit A: Peyush Bansal's Lenskart, which has found itself in all sorts of investor dilemmas for its Rs 70,000 crore valuation and a price band of Rs 382-402.

Lenskart, aiming to raise Rs 7,278.02 crore, is the second-largest among the 'Sharks,' trailing only Deepinder Goyal's Eternal (Zomato), which raised a mammoth Rs 9,375.00 crore.

Many have argued that a price to earnings of around 230x and a price-to-sales ratio of more than 10x is quite high.

But the core of the argument perhaps lies more in Lenskart's addressable market rather than the absolute valuation metrics of the company or any company.

Indeed, Lenskart, despite its rather impressive performance in overseas markets, is fundamentally tied to the optical eyewear segment, which is reliant on urban consumption and replacement cycles.

This stands in contrast to another 'Shark', Deepinder Goyal's Eternal (Zomato). At a current price to earnings ratio of 134 and a mammoth market capitalisation of over Rs 3.1 lakh crore, the company's valuation is steep, and for extended periods, the price to earnings ratio has even crossed 1000.

However, the underlying rationale is the addressable market. Eternal, in all its glory, is a tech platform serving the entirety of the country's urban and semi-urban food delivery market while also expanding into quick commerce, which in turn, has become the company's key revenue driver.

Moreover, Eternal has a slew of other verticals, including the dining out segment, the District App and the Hyperpure business.

This, coupled with 34% compounded sales growth and a turn to profitability, perhaps justifies investor faith in a higher ceiling.

This faith has been richly rewarded as well, with Eternal being the standout performer, delivering a staggering return of around 354% to its initial investors from an IPO price of Rs 72. Even compared to its listing price of Rs 216, the stock is up over 51%.

There are two more prominent shark companies - Namita Thapar's Emcure Pharma and Ghazal Alagh's Honasa Consumer (Mamaearth).

Emcure's business is wider than Lenskart, though admittedly less new-age technology-esque.

Emcure develops and manufactures a wide range of pharma and biopharma products. The company is involved in biotherapeutics and makes complex APIs, including chiral molecules, iron molecules and cytotoxic products. It has a presence in all major therapeutic areas, including gynaecology, cardiology, blood-related, oncology, respiratory, CNS & HIV.

Emcure Pharma trades with a price to earnings of 63.4, which is the lowest among the four 'shark' companies we have listed. However, with a five-year sales growth of just 9.36%, let's just say the company might see better days ahead.

Emcure is trading at Rs 1,340, which accounts for only 1.1% gain compared to its listing price of Rs 1325. However, for its initial investors, the company has delivered a solid 39.58% return from its offer price of Rs 960.

In contrast, Lenskart's revenue has jumped from Rs 3,788 crore in FY23 to Rs 6,652 crore in FY25, which accounts for an annualised growth of over 32%.

Honasa, meanwhile, commands a price-to-earnings ratio of over 127, which appears to be on par for a consumer brand still searching for scale. Its addressable market — the digital-first personal care segment — is expanding rapidly, but the transition to sustainable profit and complete market share domination has eluded most Indian brands, including Mamaearth.

In fact, Honasa is the only 'Shark' in this list to have lost investors' money, trading at Rs 274, which is 11.04% below its IPO price of Rs 308. The picture is even bleaker for those who bought on listing day; the stock is down 16.97% from its listing price of Rs 330.

Lenskart, in contrast, is essentially the king in the eye-care segment, in terms of scale. But does it have the market and year-long consistency to deliver? Only time will tell.

At the end of the day, the valuation debate hinges not only on absolute price to earnings or price to sales metrics, but on growth ceiling and market scope as well, especially given the fact that these are new-age companies, which are all in a growth phase currently.

Eternal, for all its flaws, has proven it can capture a vast and ever-expanding domain. Lenskart's multiples are high, but its competition is few and far between.

In the end, the stock market is the ultimate Shark Tank, and investors are the real judges. While Zomato's vast market potential may have helped the company secure a deal, Lenskart's IPO is perhaps facing the panel's toughest questions. Looking at its valuation, investors are left wondering if the math is justified or if, as one former Shark might say, "Yeh sab doglapan hai?"