Veteran Investor Shankar Sharma Criticizes Lenskart IPO Valuation

Veteran investor Shankar Sharma has expressed strong reservations about the upcoming Lenskart IPO, labeling it as 'overvalued' and criticizing the broader Indian tech market. The founder of GQuant Investech has stated that he has no interest in participating in Lenskart's initial public offering, citing concerns over the company's valuation metrics.

Valuation Concerns

Sharma pointed out that Lenskart is going public at a valuation of nearly 10 times its revenue. While he acknowledged that this multiple is conservative compared to previous tech IPOs in India, which have traded at 25 to 50 times revenue, he still considers it overvalued. The criticism extends beyond Lenskart to the broader Indian tech IPO market.

IPO Details and Investor Interest

Despite the criticism, Lenskart's IPO has garnered significant interest from institutional investors. Here are the key details:

Aspect	Details
Valuation	Rs 70,000 crore (approximately $8.5 billion)
Price-to-Sales Multiple	Exceeding 10x
Price-to-Earnings Ratio	230x
Anchor Book Bids	Rs 68,000 crore (nearly 10 times the IPO size)

Criticism of the Indian IPO Market

Sharma didn't mince words in his assessment of the Indian IPO market, describing it as the 'dumbest IPO market in history.' He criticized large institutional investors for hyping overvalued tech IPOs and accused merchant bankers of exploiting retail investor funds.

Broader Implications

The veteran investor's comments raise questions about the sustainability of high valuations in the Indian tech sector and the potential risks for retail investors. It also highlights the ongoing debate about the pricing of tech companies in public markets, especially those that are yet to demonstrate consistent profitability.

While Lenskart has shown strong growth and has disrupted the eyewear market in India, the concerns raised by Sharma and others suggest that potential investors should carefully consider the valuation metrics and long-term prospects of the company before making investment decisions.

As the IPO moves forward, it will be interesting to see how the market responds to these valuation concerns and whether it will impact the success of Lenskart's public offering.

Lenskart Solutions, the popular eyewear retailer, has witnessed an overwhelming response to its Initial Public Offering (IPO) anchor book, signaling strong investor interest in the company's public debut. The anchor book, a portion of shares reserved for institutional investors before the public issue, has attracted bids worth ₹68,000 crore, significantly oversubscribing the total issue size.

Key Highlights of Lenskart's IPO Anchor Book

Total Bids Received: ₹68,000 crore
Oversubscription: Approximately 10 times the total issue size
Anchor Book Oversubscription: 20 times the anchor book size

Investor Participation

The strong demand for Lenskart's shares is evident from the diverse mix of both foreign and domestic investors participating in the anchor book:

Investor Category	Contribution	Notable Participants
Foreign Institutional Investors	52%	BlackRock, GIC, Fidelity, Nomura, Capital International
Domestic Investors	48%	SBI Mutual Fund, ICICI Prudential, HDFC, Kotak, Birla Sun Life

Over 70 investors showed interest in the anchor book, highlighting the broad appeal of Lenskart's offering across the investment community.

IPO Details

Lenskart's upcoming IPO is set to be one of the significant public offerings in the Indian market. Here are the key details:

Aspect	Details
Total IPO Size	₹7,278.02 crore
Subscription Period	October 31 - November 4
Price Band	₹382 - ₹402 per share
Retail Investor Reservation	10% of the issue
Minimum Investment (1 lot)	₹14,874 (37 shares)
Targeted Valuation	₹69,500 crore

Market Implications

The robust response to Lenskart's anchor book suggests strong investor confidence in the company's business model and growth prospects. This oversubscription, particularly from both foreign and domestic institutional investors, may set a positive tone for the public subscription phase of the IPO.

For retail investors considering participation in the IPO, the strong institutional interest could be seen as a vote of confidence. However, it's crucial to note that past performance and pre-IPO interest do not guarantee future returns or success in the public market.

As Lenskart prepares to list on the stock exchanges, market participants will be keenly watching how this enthusiasm translates into public subscription and eventual trading performance. The company's ability to utilize the raised capital effectively and continue its growth trajectory will be critical factors for long-term investor interest.

The IPO market in India has been showing signs of revival, and Lenskart's offering could serve as a significant benchmark for upcoming public issues in the retail and consumer sectors.