By_shalini oraon
_ Lenskart’s listing and the valuation debate.
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The Spectacle and the Specs: Lenskart’s Muted Debut and the Great Indian Valuation Debate
The Indian startup ecosystem, a theatre of soaring ambitions and even loftier valuations, is witnessing a pivotal scene. Lenskart, the eyewear disruptor that brought style and scale to the vision correction market, is set for its market debut. Yet, the fanfare is conspicuously muted. The stock is expected to list at a modest premium, or perhaps even at par, a far cry from the blockbuster, pop-corn throwing debuts that became synonymous with the bull run of 2021. This isn’t just the story of one company’s listing; it is the latest, and one of the most telling, acts in the Great Indian Valuation Debate—a fundamental reassessment of what a new-age Indian business is truly worth.
For years, Lenskart’s narrative was the stuff of investor pitch decks come to life. It identified a massive, fragmented market—India’s eyewear industry, plagued by high prices, limited choices, and an antiquated retail experience. It built a vertically integrated model, controlling everything from design and manufacturing to its extensive network of stores and a robust online presence. It wasn’t just selling spectacles; it was selling clarity, fashion, and convenience, all wrapped into one. This vision attracted a who’s who of global investors, from SoftBank to KKR, propelling its valuation to a staggering $5 billion+ in the private markets.
So, why the lukewarm reception on the public bourses? The answer lies in the chasm that has opened between the “growth-at-all-costs” philosophy of private markets and the “show-me-the-money” pragmatism of public investors.
The Private Market Hype vs. Public Market Scrutiny
In the private funding arena, valuation is an art form driven by narrative, total addressable market (TAM), and futuristic projections. Investors bet on a company’s potential to dominate a sector for the next decade. Lenskart’s TAM was, and remains, enormous. With over 550 million people in India needing vision correction and a growing affinity for fashion eyewear and sunglasses, the growth story is compelling. Private investors paid a premium for this potential, funding deep discounts and aggressive expansion to cement Lenskart’s market leadership.
Public market investors, however, are a different breed. They are the auditors of that potential. They peer into the financial statements, not just the pitch deck. Their concerns are multifaceted:
1. The Profitability Conundrum: While Lenskart has achieved EBITDA profitability, a significant portion of its revenue is still driven by the low-margin business of corrective lenses. The high-margin sunglasses and blue-light glasses segment is growing but is more susceptible to competition and fashion trends. Public markets want to see not just profit, but high-quality, scalable, and defensible profitability. The question is whether Lenskart’s vertically integrated model, while a strength, is capital-intensive enough to cap its long-term profit margins compared to a pure-play software company.
2. The Spectre of Competition: The eyewear market, while large, is not immune to competition. From established players like Titan Eyeplus to a flood of D2C online brands (Specsmakers, Coolwinks) and the ever-looming threat of Reliance and Tata entering the fray with their own deep pockets and retail might, Lenskart’s moat is being tested. Public markets are asking: how much of a pricing advantage and customer loyalty can Lenskart truly maintain?
3. The “Tech” Tag Question: A significant part of the premium valuation for startups stems from their classification as “tech” companies. But how much of Lenskart is truly a tech company versus a modern, efficient retailer? Its use of AI for frame recommendations, its virtual try-on features, and its data-driven supply chain are undeniable tech strengths. However, its core revenue driver remains the physical sale of a product from its 2,000+ stores. This hybrid identity creates a valuation dilemma. Public markets are struggling to slot it into a clear category—is it a tech stock deserving of high multiples, or a retail stock that should be valued more conservatively?
A Symptom of a Broader Correction
Lenskart’s muted listing is not an isolated event. It is part of a global and domestic recalibration of startup valuations. The era of free money is over. Rising interest rates have made investors risk-averse, shifting focus from distant growth promises to present-day cash flows and profitability. The bruising experiences of other new-age IPOs, where stocks crashed spectacularly from their listing peaks, have left public investors scarred and cautious. They are no longer willing to pay a “vision premium”; they demand a “value premium.”
This creates a painful pinch for companies like Lenskart. They are caught between the high expectations set by their last private funding round and the newly sober reality of the public markets. A flat or mildly positive listing is not a failure; it is a market-mediated correction. It represents a fair price discovery, a moment where the collective wisdom of the public market sets a new, more sustainable baseline for growth.
The Silver Lining: A Return to Sanity
For the long-term health of the Indian startup ecosystem, this valuation debate is not a crisis but a necessary cleanse. It forces a discipline that was often absent during the funding frenzy.
· Focus on Fundamentals: Startups will now be incentivized to build businesses on the foundation of unit economics and sustainable growth, not just top-line revenue and customer acquisition at any cost.
· Realistic Expectations: Founders and early employees will have more grounded expectations about wealth creation, leading to less disappointment and a greater focus on building enduring companies.
· Stronger Public Listings: Companies that do go public after this correction will likely be more mature, profitable, and resilient, offering better long-term value to retail investors and strengthening the overall market.
Lenskart’s journey is far from over. Its market leadership, strong brand recall, and integrated model are formidable assets. Its muted listing is not an epitaph but a recalibration. It signals the end of one act—the age of unbridled valuation hype—and the beginning of another: the era of accountable, sustainable, and fundamentally sound growth. The spectacle of the IPO may be muted, but the future of the company, and the ecosystem it represents, will be clearer for it. The market, having adjusted its spectacles, is now seeing these new-age businesses not through a lens of hype, but with a sharper, more discerning focus.