Mumbai: One of India’s most hyped IPOs this season made a poor debut on the BSE and NSE as it listed at a discount of 2.99% on the BSE and just 1.75% on the NSE from its issue price of Rs.402 per share. The share initially plunged 10% just after the listing, and recovered slightly after that.
Now that Lenskart is listed, Peyush Bansal has more explaining to do, especially since the IPO was subscribed over 20 times, with its price-to-earnings ratio (P/E ratio) quite high at about 230 times, mostly driven by hype around the company’s success.
Even though the company is one of the few customer-facing startups that has managed to expand overseas, it still hasn’t been profitable enough to sustain its operations, with this IPO expected to help the company sustain its profitability.
Investors continue to look at Peyush Bansal for hope, especially since the grey market premium (GMP) for the issue stood at Rs. 95, implying a listing gain of around 24%, but has plunged to just 2.49% on listing.
In an interview with CNBC-TV18, Peyush Bansal underscored the company’s long term potential of India’s eyewear market, even as its P/E ratio is still considered expensive by market standards.
“As a company and as an entrepreneur, our job is to create value for the customer, and now, increasingly, for the shareholder as well. As far as valuation is concerned, it’s what the market decides,”
Though it is quite early to comment on the company’s growth prospects, this development is been keenly watched by its investors, even as Peyush has been positioning himself as a mentor to other startups, courtesy Shark Tank.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in stocks includes financial risks, and past performance is not indicative of future results. Readers should conduct their own research or consult with a qualified financial advisor before making any investment decisions.
