Ronnie Screwvala says Peyush Bansal priced Lenskart IPO 20% below actual value; adds Titan ‘didn’t expand the market’

Ronnie Screwvala

Early Lenskart investor Ronnie Screwvala mounted a strong defence of the company's IPO pricing, asserting that co-founder and CEO Peyush Bansal set the offer at around 20% below what he considered the company’s actual value.

Screwvala, a serial entrepreneur and an early backer of Lenskart, spoke to Moneycontrol ahead of the eyewear retailer’s market debut. He also drew a comparison with Tata-owned Titan EyePlus, stating that while it had been in the market for “years”, it didn’t expand the market the way Lenskart did.

“Peyush has been stoic from the beginning that I want to price it with at least 20% discount to what it could be,” he said.

Why is Lenskart IPO in the news?

Lenskart, which lists next week, has been in the eye of the storm in recent weeks over its targeted IPO valuation of around Rs 70,000 crore ($7.97 billion).

Screwvala argued that Lenskart’s fundamentals, growth predictability, and omnichannel execution set it apart from most new-age Indian startups that have gone public in recent years.

“There are very few companies in India that have been able to take the omnichannel model to the next level - not just build a back end, but create a manufacturing hub and deliver very high gross margins,” he said.

He added that Lenskart’s growth trajectory remains highly visible.

“They have one of the most predictable CAGRs for the next five to ten years. They’ll open 400 to 500 stores a year and still won’t get saturated for another ten years because the total addressable market is huge.”

Is Lenskart fairly valued?

Screwvala dismissed recent chatter on social media questioning Lenskart’s valuation multiples - 230 times EBITDA. He called such claims “factually wrong” and “fed by vested interests”.

“That formula is wrong. It’s been fed by six vested-interest people,” he said. “What is that ratio?
Firstly, you need an EBITDA multiple. Anyone talking about current-year EBITDA is not looking at how growth companies are valued.”

How should investors value Lenskart?

Instead, he argued that Lenskart should be valued on a one-year forward EBITDA multiple of 40–50 times, a benchmark he believes is justified given its consistent earnings trajectory and 30 percent-plus CAGR.

“Forty to fifty times one-year forward EBITDA is a great way to value a company like this — one that’s consistent in EBITDA delivery, consistent and above 30 percent CAGR,” he said. “I’m not saying it’s a monopoly, but there’s no real second player. It will take five years for anyone to catch up to this size.”

“But the valuation is what the market will determine. Otherwise, why would it get subscribed 28 times?”, he said.

Is Zomato overvalued?

Screwvala also took aim at the valuations of other listed internet companies like Zomato, Nykaa and PB Fintech, stating that they were “way off.”

“Paytm loses money, Zomato loses money, Swiggy loses money - nobody’s bothered about that. Zomato market cap is $31 billion and makes one rupee profit if you take out the treasury income from its Rs 16,000 crore cash pile”, he said.

Why Lenskart is bigger than Titan

He also argued why Lenskart has projected a bigger market compared to rival Titan.

“So for Titan, TAM (total addressable market) is what they are operating with. They can't open up the market. We have to accept that Titan was there long before Lenskart was there, but they didn't open up the market. So when the market leader defines the market, that is the market,” he said.