Lenskart, the largest eyewear retailer in India, will be the first Indian company to issue an initial public offering (IPO) on October 31, to raise ₹7,278 crore to support its aggressive store growth plan. With Lenskart approaching its IPO, investors have a chance to be part of the development of a prominent retail brand. However, the November 7 listing will be monitored, and the market debut is expected to be high due to the underlying strength in the fundamentals and growth potential.

IPO structure and expansion strategy

Lenskart IPO will go under subscriptions on October 31 and close on November 2. The issue will consist of a fresh offering of shares to the value of ₹2,000 crore, and an offer-for-sale (OFS) portion of ₹5,278 crore. The fresh issue proceeds will be used in expanding Lenskart’s retail presence, with the existing investors being able to divest a portion of their holdings because of the OFS. The IPO price range is between ₹250 and ₹265 per share. The minimum price that investors can bid is 56 shares and multiples thereof. It is planned to launch the listing on November 7 on BSE and NSE.

Based on the grey market trends, Lenskart IPO is being quoted at a grey market premium (GMP) of ₹50 per share, which implies a listing premium of 19. This high GMP signifies the confidence of investors and the high demand for the issue. According to market observers, the premium has been influenced by the fact that Lenskart has a good brand name, good growth, and expansion strategies. The omnichannel and tech-based retailing approach has made the company a market leader in its eyewear industry in India.

Use of funds and key investors

The fresh issue of ₹2,000 crore will be utilized largely to finance store expansion. Lenskart aims to expand in India and in some of the international markets. The business intends to enhance its supply chain, customer experience, and technology investment to help in its development. This growth plan is in line with the vision of Lenskart to be a market leader in the eyewear industry in the world market. The expansion of its retail presence will help the company access untapped markets and generate income.

The IPO will have partial exits by various existing investors in the OFS portion of the IPO. Key stakeholders like SoftBank, Kedaara Capital, and TR Capital will likely sell down. A small percentage of shares will also be sold by founder Peyush Bansal. Even with the presence of the OFS, Bansal will still have a huge portion in the company and will still be a participatory stakeholder in the company. The IPO will assist Lenskart in diversifying its shareholders and attract investors in the public market.

The popularity has been supported by the tech-enabled stores, home eye check-up services, and the expansive product range. The IPO should also help Lenskart to firmly entrench itself in the market and raise the capital to enable it to grow in the long term. The innovative nature and customer-centric model will keep the company going, according to analysts.

Conclusion

The IPO on October 31 is a major milestone for Lenskart, as it embarks on its growth path. The offering will have a target of ₹7,278 crore and will be highly attractive to the investors as per the 19% GMP. The capital will facilitate the ambitious expansion program by the company to build more stores, as it will enable the company to grow and enter new markets.