16% cut from IPO price? Lenskart gets a 'Sell' from Ambit just before listing

Lenskart's Pre-Listing Dynamics: A Deeper Look at Valuation Signals

Eyewear retailer Lenskart, a highly anticipated Indian IPO, received a bearish rating from Ambit Capital just before its market debut. This negative outlook, citing lofty valuations and implying a 16% downside from the IPO price, emerged despite the IPO's strong subscription across investor categories. Ambit Capital set an assessment price of Rs 337, suggesting a 16% potential adjustment from Lenskart's IPO price of Rs 402 per share. Notably, Lenskart's IPO garnered over Rs 1 lakh crore in bids and was subscribed 28 times overall, with institutional investors showing exceptional interest, subscribing 45 times.

Key Takeaways

• A major brokerage issued a negative rating on Lenskart pre-listing, citing valuation concerns despite strong IPO demand.
• The assessment price suggests a significant downside from the IPO price, challenging investor expectations for immediate gains in the Indian market.
• Grey Market Premium (GMP) for Lenskart shares has sharply declined, indicating reduced listing premium expectations among Indian investors.
• Investors should weigh the company's long-term growth potential against current elevated valuations and critical analyst perspectives.

Company Overview

Lenskart is a prominent eyewear retailer operating in India, with its recent IPO being one of the most closely watched market events for 2025. The company's public offering was structured at a total valuation of Rs 7,278 crore. This figure included both a fresh issue of shares and an offer for sale component by its promoters and early financial backers, aiming to capitalize on the growing Indian consumer market.

Market Analysis

Lenskart's IPO experienced a robust market reception, attracting significant investor capital with total bids exceeding Rs 1 lakh crore. The offering was considerably oversubscribed across all investor categories, reaching 28 times its available shares. Institutional investors demonstrated particularly strong interest, oversubscribing their allotted portion 45 times. However, a notable shift in market sentiment was observed in the Grey Market Premium (GMP) for Lenskart shares. The GMP witnessed a sharp decline of over 80%, falling from Rs 108 to Rs 15. This substantial reduction suggests that market participants now anticipate only a modest 3-4% premium upon the company's listing.

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Valuation Analysis

Ambit Capital issued a bearish assessment on Lenskart, providing an assessment price of Rs 337. This figure indicates a potential 16% adjustment from the IPO price of Rs 402 per share. Analysts widely characterized Lenskart's IPO valuations as elevated, with Ambit specifically noting limited room for upward movement at the prevailing price levels. Specific financial metrics such as price-to-earnings (P/E) or price-to-sales (P/S) ratios that formed the basis of this valuation were not disclosed in the available data.

Risk Assessment

The primary risk associated with Lenskart's public offering centers on its valuation. Ambit Capital's analysis suggests that current price levels leave little scope for appreciation, despite the company's demonstrated long-term growth potential within the eyewear market. The negative sentiment stemming from a major brokerage's pre-listing assessment could significantly influence investor confidence and market perception. Furthermore, the sharp reduction in Grey Market Premium (GMP) serves as a clear signal of diminished market enthusiasm regarding potential listing gains, adding another layer of risk for initial investors.

Investment Perspective

While Lenskart undeniably exhibits strong long-term growth potential and successfully garnered substantial subscription levels during its IPO, investors are now confronted with a critical outlook from a major brokerage. The implied 16% adjustment from the IPO price, coupled with the decline in Grey Market Premium (GMP), suggests that caution is warranted regarding immediate listing performance. Therefore, investors should diligently evaluate the balance between the company's established market position and the perceived elevated valuations that have drawn analyst scrutiny.

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Execution Guardrails

1. Market scanning: Continuously monitors regulatory filings, financial news, and sentiment to highlight actionable IPO events.
2. AI risk and potential returns analysis: Benchmarks fundamentals, valuations, and demand indicators to quantify upside versus risk.
3. pre-trade position sizing recommendations and entry: Applies risk limits and provides recommendations for subscriptions or allocations in line with investor preferences.
4. Real-time monitoring and adjustments: Tracks listing updates, market tone, and liquidity to adjust positioning as signals evolve.
5. Automated exit and performance tracking: helps you track configured exits and records outcomes for ongoing strategy refinement.

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How PortoAI Helps You

• PortoAI provides Indian retail investors with AI-driven market scanning to detect critical pre-listing signals like analyst ratings.
• Our platform tracks real-time sentiment indicators, such as Grey Market Premium (GMP) fluctuations, for timely insights.
• PortoAI helps identify potential risks and opportunities by autonomously processing vast amounts of market data and news.

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Sources

• Lenskart's Pre-Listing Bearish Rating from Ambit (economictimes.indiatimes.com; date visible on page) — https://economictimes.indiatimes.com/markets/ipos/fpos/16-cut-from-ipo-price-lenskart-gets-a-sell-from-ambit-just-before-listing/articleshow/125160723.cms

Disclaimer: Educational content, not investment advice.