Lenskart shares settled higher on Monday at Rs 404.55 per share on the NSE, up 0.63 percent from the issue price. The stock ended 2.42 percent higher from the open price.
The shares of the company made a weak market debut to list at about 3 percent discount from its IPO price. The initial public offer (IPO) of eyewear retailer received 28.26 times subscription between October 31-November 4 in the primary market.
Shares of Lenskart Solutions Ltd were listed at Rs 395 per share on the NSE, a discount of 1.74 percent from its IPO price. The Rs 7,278-crore IPO had a price band of Rs 382-402 per share.
On the BSE, the shares of the company were listed at Rs 390 apiece, a discount of 2.99 percent. The company's total market capitalization post listing of shares stood at Rs 67,659.94-crore.
Lenskart IPO share market debut was lower than the expectations in the grey market, which had expected a premium listing of about 2 percent.
Lenskart share market listing: Should you buy, sell or hold?
Shivani Nyati, Head of Wealth at Swastika Investmart Ltd., noted "Lenskart Solutions Limited made a tepid debut on the stock market with a listing of approximately -1.74% over its issue price of 402, indicating a muted response despite strong brand visibility and market dominance in the eyewear segment."
While concerns around high valuation, recent losses, and competitive intensity weighed on short-term sentiment, the IPO received solid institutional interest backed by expectations of strong growth in international markets and improving margins.
"Investors allotted shares may consider holding for the medium to long term, supported by earnings visibility and expanding store footprint, with a stop loss around Rs 350 and short-term traders may exit the position and look for better opportunities elsewhere," Nyati added.
Ambit Capital assigned a "Sell" rating to Lenskart even before its stock market debut. The brokerage, which initiated coverage on the stock, stated that while Lenskart’s long-term growth prospects remain strong, the current valuation offers limited potential for further upside. The analysts at the brokerage set a target price of Rs 337 per share, representing a 16 percent downside from the IPO price of Rs 402 per share.
The company proposes to use the proceeds from the IPO for strategic initiatives, including capital expenditure to set up new company-operated, company-owned (CoCo) stores in India, and payments under lease, rent, and licence agreements for these CoCo stores.
Investments in technology and cloud infrastructure, brand marketing and business promotion to enhance brand awareness, potential unidentified inorganic acquisitions, and general corporate purposes were some of the other goals stated by the firm.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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