The much-anticipated Initial Public Offering (IPO) of SoftBank-backed eyewear startup Lenskart is set to open. For subscription on October 31, offering investors a chance to participate in its ₹7,278 crore issue. While the IPO has generated considerable buzz, and its shares are reportedly trading at a Grey Market Premium (GMP) of ₹70 (17. 41%), potential investors are advised to explore deeper into the company's fundamentals and financial health rather than relying solely on market speculation, while before making an investment decision, it's crucial to understand three significant risk factors that could impact Lenskart's business trajectory.
Lenskart, a prominent player in the eyewear industry, sources a portion of its raw materials and frames from China.
The company has a significant stake, specifically 51%, in a joint venture named Boafeng Framekart Technology, which operates a manufacturing facility in China. Established in 2018, this joint venture is dedicated to the manufacturing and sale of spectacle lenses, frames, and accessories. This reliance on Chinese suppliers exposes Lenskart to potential supply chain disruptions. Any adverse events such as geopolitical tensions, trade restrictions, or production setbacks in China could severely impact the. Availability of essential raw materials and finished goods, thereby disrupting Lenskart's operations and ultimately affecting its revenue and profitability.
Threat of Technological Disruption in Eyecare
The eyewear industry is constantly evolving, with rapid technological advancements shaping its future. Lenskart faces a potential threat from the growing adoption of advanced eye correction surgeries such as LASIC (Laser-Assisted In Situ Keratomileusis) and SMILE (Small Incision Lenticule Extraction). These laser-based procedures offer effective solutions for vision correction, potentially reducing or eliminating the need for traditional eyeglasses and contact lenses. The market for these surgeries is expanding rapidly, gaining traction in new demographics and geographies. Should these technologies become more prevalent and accessible, the overall demand for prescription eyewear could decline, directly impacting Lenskart's sales volume and profitability, while this technological shift represents a long-term challenge to the company's core business model.
Limited Control Over Retail Franchise Network
A substantial portion of Lenskart's retail presence operates through a franchise model. As of June 2025, the company had 472 franchised stores globally, constituting approximately 22% of its total retail network. Under franchise agreements, Lenskart grants rights to use its brand name, trademarks, designs, patents, and other intellectual properties in exchange for a fixed, one-time license fee. However, a critical aspect of this model is that the company doesn't retain full operational or financial control over these franchised outlets. This introduces a significant risk: if a franchisee fails to adhere to Lenskart's brand standards, operational policies, or strategic objectives, it could lead to inconsistencies in customer experience, reputational damage, and potentially legal or financial repercussions, ultimately undermining the brand's integrity and value.
Lenskart IPO Details at a Glance
The Lenskart IPO is priced in a band of ₹382-₹402 per share, with a lot size of 37 shares. The issue will be open from October 31 to November 4. A significant portion, 75%, is reserved for Qualified Institutional Buyers (QIBs), while 15% is allocated for Non-Institutional Investors (NIIs), and the remaining 10% for retail investors. The final allotment of shares is expected on November 6, with listing on both BSE and NSE anticipated on November 10. MUFG InTime has been appointed as the registrar for the issue.
Utilization of Funds and Financial Health
The IPO comprises a fresh issue of shares worth ₹2,150, while 00 crore, alongside an Offer For Sale (OFS) of 12,75,62,573 equity shares, each with a face value of ₹2. The proceeds from the OFS will go to the selling founder shareholders, including SoftBank and Temasek. The funds raised through the fresh issue are earmarked for various strategic initiatives: ₹272. 62 crore for establishing new 'Coco' stores, ₹591. 44 crore for lease/rent/license agreements for these stores, ₹213, while 38 crore for investing in technology and cloud infrastructure, and ₹320. 06 crore for marketing activities, while the remaining funds will be allocated towards acquisitions and general corporate purposes. Financially, Lenskart reported a net profit of ₹297 crore in FY2025, a significant turnaround from a loss of ₹10 crore in FY2024, while the company's revenue also surged by 22% during this period, reaching ₹6,625 crore, indicating solid growth and improved financial performance.
