According to CNBC, SoftBank-backed eyewear retailer Lenskart Solutions had a volatile market debut Monday, with shares initially plunging as much as 11% below their 402 rupee ($4.53) issue price before recovering slightly. The stock was last trading just 0.05% higher at 402.2 rupees after the rocky opening session. This tepid performance comes despite Lenskart’s $828 million IPO being massively oversubscribed, drawing bids more than 28 times the shares available. The weak start stands in stark contrast to home service startup Urban Company’s September listing, which surged over 60% on its debut day. Institutional investors and high-net-worth individuals drove most of the demand, while retail interest remained relatively muted.
Oversubscribed but underwhelming
Here’s the thing that really stands out: this IPO was oversubscribed 28 times. That’s massive demand by any measure. But when the rubber hit the road, the stock couldn’t hold its ground. It makes you wonder – were institutions just playing the allocation game rather than showing genuine conviction? The fact that retail investors stayed relatively cool tells me regular folks saw something the big money missed.
The SoftBank effect
Let’s not forget this is another SoftBank-backed company hitting the public markets. And we’ve seen this movie before. SoftBank’s track record with IPOs has been… mixed, to put it politely. They pour massive amounts into companies, create huge buzz, but sometimes the fundamentals don’t quite match the hype. When you’re dealing with physical retail like eyewear stores, the economics are very different from pure software plays. Higher costs, inventory challenges, real estate expenses – it’s a tough business to scale profitably.
Indian tech IPO reality check
This could be a reality check for the Indian tech IPO market. Urban Company’s 60% pop set expectations sky-high, but maybe that was the exception rather than the rule. Lenskart’s stumble suggests investors are getting more selective about which consumer tech stories they’re willing to back at premium valuations. They’re looking beyond the growth narrative and actually scrutinizing path to profitability. And honestly, that’s probably healthy for the market long-term.
What’s next for Lenskart
Now the pressure’s really on for Lenskart to deliver. They’ve got to prove they can maintain growth while improving margins in a competitive eyewear market. The stock’s recovery from that 11% drop shows there are still believers, but they’ll need to show quarter after quarter of execution. Basically, the IPO was the easy part – now comes the hard work of being a public company where every move gets scrutinized. We’ll see if they can turn this rocky start into a success story.
