Subscribe for Lenskart Solutions Ltd IPO; Choice Equity Broking

Choice Equity Broking, Lenskart Solutions Ltd

Lenskart Solutions Ltd. (LSL), Incorporated on May 19, 2008, is a technology-driven eyewear company with integrated operations across design, manufacturing, branding, and retailing of eyewear products. The company primarily offers prescription eyeglasses, sunglasses, contact lenses, and eyewear accessories. Operating through a direct-to-consumer model, LSL designs and sells a diverse range of products under its own brands and sub-brands. • This public issue is a combination of fresh issue (Rs. 2,150cr) and OFS (Rs. 4,872.89 - 5,128.02cr). The company will not receive any proceeds from the OFS portion. From the fresh issue net proceeds, the company will be utilizing Rs. 272.62cr for capital expenditure towards set-up of new CoCo stores in India, Rs. 591.44cr for Expenditure for lease/rent/license agreements related payments for CoCo stores operated by the Company, in India, Rs. 213.37cr for Investing in technology and cloud infrastructure, and Rs. 320cr for Brand marketing and business promotion expenses for enhancing brand awareness. Residual proceeds will be used for general corporate purposes.

Valuation and Outlook

Billionaire investor Radhakishan Damani has invested around Rs. 90cr in the company during its pre-IPO funding round. About 40% of its revenue comes from international markets. Given its strong growth potential but high valuation and profitability risks, this offering is best suited for investors with a higher risk appetite and a long-term investment horizon. Thus we assign a “Subscribe for Long Term” rating for this issue.