Shares of SoftBank-backed eyewear retailer Lenskart Solutions Ltd opened to a lackluster debut on India’s stock exchanges Monday, falling as much as 11 percent below their issue price before managing a mild recovery in early trade.

By midday, the stock was trading at $4.53, barely above its ?402 issue price, reflecting investor hesitation after one of the country’s most anticipated listings of 2025.

The tepid debut stood in sharp contrast to Urban Company’s September listing, which surged more than 60 percent on its first trading day, underscoring how fickle investor sentiment has become toward India’s tech-driven IPOs.

Lenskart’s $828 million IPO — the largest consumer internet listing of the year — was oversubscribed 28 times, drawing strong bids from institutional and high-net-worth investors. Retail participation, however, was notably softer, as smaller investors appeared to focus on short-term gains rather than long-term holdings.

Many smaller investors have been jumping from one IPO to another, booking early profits and moving on, Bhavesh Shah, head of investment banking at Equirus Capital, told CNBC.

This churn is believed to be creating heavy selling pressure on listing day.

A recent study by the Securities and Exchange Board of India (SEBI) revealed that 54 percent of IPO shares allotted to investors — excluding anchor investors — are sold within a week of listing. Between April 2021 and December 2024, retail investors offloaded 50 percent of the shares by value within a week of listing and 70 percent within a year, reflecting a pattern of speculative trading in the IPO market.

Valuation Debate

Lenskart’s debut has reignited debate over whether India’s startup IPOs are being priced too aggressively. The eyewear retailer, which counts SoftBank, Temasek, and Kedaara Capital among its backers, was valued at more than $11 billion at listing — placing it among India’s most richly valued consumer tech firms.

Some analysts have warned that the issue price implied a price-to-earnings (P/E) ratio of over 200, an unusually high multiple given the company’s relatively modest profitability.

“The IPO price valued Lenskart at over 200 times earnings, and most of its FY25 profits are expected to come from non-core business operations,” said Devina Mehra, founder of investment firm First Global.

Others, however, remain bullish about the company’s long-term prospects. Founded in 2010 by Peyush Bansal, Lenskart has built one of India’s largest optical retail networks, with over 2,500 stores across the country and growing international operations in the Middle East and Southeast Asia.

It is believed that Lenskart’s fundamentals remain solid, and its leadership in the optical retail segment gives it a strong runway for growth.

Institutional Support

The company’s investor roster reflects deep global interest. Top institutional buyers included the Government of Singapore (2.97 percent), BlackRock, and Fidelity, which acquired stakes through multiple funds.

Despite this backing, analysts believe Lenskart’s performance in the coming quarters will depend on whether it can justify its lofty valuation with sustainable revenue growth and margin expansion.

The company reported consolidated revenue of $427 million in FY24, up 38 percent year-on-year, but net profit margins remain tight due to high marketing and expansion costs.

Lenskart has also been diversifying through acquisitions, including a controlling stake in Japanese eyewear brand Owndays, as it aims to establish itself as a global optical retail powerhouse.

Still, the muted market response suggests that investors remain cautious about high-growth startups listing at premium valuations. While strong institutional interest offers credibility, analysts warn that post-listing performance will depend heavily on how the company converts its brand strength into sustained profitability.