The recent $821 million initial public offering (IPO) by eyewear retailer Lenskart Solutions Ltd. saw its shares sell out rapidly last week. While the offering demonstrated robust investor demand, the company’s valuation has simultaneously triggered renewed discussions about whether Indian technology startups are entering the public markets at excessively high price points.

The debate intensified after DSP Asset Managers Pvt., one of the anchor investors, publicly addressed the social media criticism directed at the IPO’s pricing. The mutual fund firm defended its investment, asserting that Lenskart’s business model is “strong and scalable,” yet it acknowledged the deal was “expensive.”

Valuation Concerns and Market Context

Lenskart’s pricing is being scrutinized by market experts who worry that retail-investor-backed mutual funds may be paying premium prices for tech firms that have yet to secure consistent profitability.

At the upper end of its price band (₹382 to ₹402 per share), the IPO values the company at approximately $8 billion. This figure represents roughly 10 times its enterprise value to sales from the previous year. According to analysts, this valuation is significantly higher compared to global established peers, such as EssilorLuxottica SA, which trades at about 45 times its forward earnings. One analyst described the offering as providing “scale but not necessarily value.”

Even while advising clients to subscribe, analysts at SBICAP Securities labeled the valuation “stretched” and suggested that immediate listing gains might be minimal. However, they cited Lenskart’s powerful brand and vast growth potential within India’s underdeveloped eyewear market as justifications for long-term investment.

A Familiar Pattern

The apprehension surrounding Lenskart’s IPO echoes previous instances in the Indian tech sector. Similar intense debates erupted during the public debuts of major, yet loss-making, startups like Zomato (in 2021) and the operator of Paytm, One 97 Communications Ltd., which saw one of the worst market openings for a major IPO.

Since early 2021, a significant number of Indian startups have gone public, but Bloomberg data indicates that shares for nearly half of them are currently trading below their original issue prices, with Paytm being a notable laggard.

Founded by entrepreneur Peyush Bansal, Lenskart’s ability to attract high-profile investors like billionaire Radhakishan Damani underscores the prevailing confidence in India’s consumer growth trajectory. The company currently holds a modest 4%–6% market share in the prescription eyewear segment, leaving substantial room for expansion against unorganized competitors. Analysts expect the company’s profitability to improve as it continues to scale operations.