Introduction
Somewhere between the sparkle of a new eyewear collection and the gleam of a billion-dollar valuation, Lenskart seems to have mistaken its IPO for a luxury fashion show. The company’s ₹70,000-crore price tag glitters like a limited-edition spectacle frame, glossy, oversized, and a bit hard to justify under bright analytical light. Yet, investors are queuing up like it’s a Black Friday sale at Dalal Street’s optical counter, convinced that clarity will come after listing day. It’s a familiar sight. India’s IPO market has turned into a catwalk for overconfident unicorns, each strutting its way to the bourse with a valuation that seems to have been set during a sugar high. We’ve seen this play out before: Paytm’s grand entrance, Nykaa’s glamour shot, Zomato’s hunger games, Mamaearth’s soft-focus debut, and even the long-delayed Oyo, which seems to be permanently about to file. Every new-age company insists it’s not overvalued, just future-ready. Translation: we’ll grow into our numbers someday, promise.
The IPO frenzy has now evolved into something between a Bollywood red carpet and a casino night. Merchant bankers play hype DJs, financial influencers rehearse listing gain predictions, and retail investors, armed with ASBA accounts and optimism, join the queue as if buying lottery tickets that say Disruptor on them. For many founders, public listing isn’t about raising capital anymore; it’s about validation, a ceremonial knighthood into India’s startup elite, complete with a valuation headline that sounds good on CNBC and LinkedIn. What’s truly wild is how valuation inflation has become the new national sport, rivalling cricket and tax-saving in popularity. Every few months, the markets welcome another IPO priced to perfection, which in plain English means priced to fantasy. Analysts mumble about fundamentals, but no one really wants to ruin the party, not when grey market premiums are trending on Telegram and retail demand is flooding in faster than one can say oversubscribed. In the middle of it all, Lenskart’s IPO is just another chapter in India’s great valuation soap opera, a spectacle about spectacles, where numbers wear designer frames and everyone pretends they can see the future clearly.
70,000 Crore Valuation
Now, about that ₹70,000-crore valuation, Lenskart’s pitch deck sparkle hides a lot of prescription strength. On paper, the company’s numbers look impressive: nearly ₹4,000 crore in revenue for FY2025 and a long-awaited turn to profitability. But at roughly 18 times sales, the valuation lens starts to warp. For comparison, even the most established global eyewear brands like EssilorLuxottica trade at a fraction of that multiple, and they own half the sunglasses on planet Earth. Lenskart, meanwhile, sells spectacles and optimism, powered by a hybrid of retail stores, influencer marketing, and buzzwords like omnichannel experience. It’s a great business, sure, just maybe not that great. What’s happening here is classic startup valuation theatre. Private investors who entered during the pandemic’s digital gold rush don’t want to mark down their holdings. So, when it’s time to list, they conjure a narrative about “total addressable markets, AI-powered retail, and vision for all, anything that helps justify a few extra zeroes. The bankers nod, the founders beam, and suddenly, your local optician chain looks like a Silicon Valley disruptor. Lenskart’s eyewear empire might indeed have strong margins and loyal customers, but the math doesn’t justify the mythology. This IPO, like so many before it, isn’t about what the company is worth today; it’s about how convincingly it can sell tomorrow’s worth at today’s price.
The irony is almost poetic. A company that literally helps people see better is now blurring the lines between value and valuation. And retail investors, bless their enthusiasm, are adjusting their focus not on financial statements but on grey market premiums. It’s a story that’s become as predictable as a rom-com: founders promise disruption, bankers whisper oversubscribed, and retail buyers end up holding shares that need corrective lenses by listing day.
The Inflated Valuations
Every few quarters, a new startup steps into the IPO ring, draped in buzzwords, brand ambassadors, and investor slides that look more like sci-fi storyboards than financial disclosures. From Paytm’s trillion-rupee delusion to Nykaa’s beauty parade of multiples, and from Zomato’s hunger-fueled optimism to Mamaearth’s influencer-powered pricing, the pattern is absurdly consistent: the numbers may not add up, but the narrative always does. It starts in the private market, where venture capitalists and late-stage funds mark up valuations like street vendors marking up Diwali sweets. A funding round at a high price becomes a trophy, not a reflection of fundamentals. Founders love it because they can flaunt a unicorn badge on LinkedIn; investors love it because it inflates their portfolio NAVs. And when the private party gets too crowded, the IPO becomes the final exit door, a way to offload those paper gains onto the public, wrapped in a glossy prospectus and sold as national progress.
The trick is subtle but brilliant. Companies highlight Gross Merchandise Value instead of profit, Adjusted EBITDA instead of earnings, and Total Addressable Market instead of market share. These are the magic words of startup finance, designed to hypnotise analysts and journalists alike. We’re not loss-making, they insist, we’re investing in growth. Translation: we’re still losing money, but it sounds better in a deck. Every IPO pitch now reads like a motivational TED Talk, complete with futuristic graphs and the occasional line about empowering Bharat. Merchant bankers, of course, play their part beautifully. Their job isn’t to question valuations; it’s to price the dream as expensively as the market will tolerate. They round up a few anchor investors, often the same global funds already holding stakes, and call it strong institutional demand. Then comes the grey market frenzy, the YouTube hype, and the retail rush, the perfect recipe for a listing-day pop, at least until reality catches up.
And it always does. The IPO market in India today feels like a parallel universe where companies with wafer-thin margins are priced like monopolies, and growth projections read like science fiction. When the music stops, the retail investor is usually the one left standing without a chair, or in this case, holding shares that look far less shiny once the first quarterly report arrives. In essence, Indian IPOs have become the art of storytelling disguised as financial engineering. Founders narrate, bankers curate, analysts annotate, and retail investors participate. Everyone knows the joke, but nobody wants to stop laughing, not while there’s still a premium to chase.
Common Red Flags
For the average retail investor, IPO season in India feels like festival season, every week there’s a new celebration, a new must-buy, a new promise of listing gains. Telegram groups light up, YouTube experts whisper secret GMPs like stock market astrologers, and everyone suddenly becomes an equity sage. But behind the confetti of hype lies a pattern of red flags so common they could be printed on the application form itself. The first red flag is the Offer for Sale trap, when a majority of the IPO isn’t raising fresh capital, but rather existing investors cashing out. That’s the financial equivalent of the chef leaving the restaurant right before opening night. If 60–70% of the issue is an OFS, it usually means private backers have already had their fill, and the public is being invited to pick up the tab. Sure, founders call it broad-basing ownership, but in plain English, it’s an exit strategy dressed as opportunity.
Then comes the valuation illusion, where everything looks good because everyone says it’s good. The company might have growing revenues, but look closely at the profitability line. Many IPO-bound startups show a sudden, miraculous profit in the year before listing, often achieved by accounting alchemy, one-time adjustments, or just deferring costs. It’s a magic trick: the pre-IPO numbers sparkle, only for post-listing earnings to vanish faster than a bonus issue rumour. If the business model still relies on burning cash to capture market share, that’s not scaling, that’s subsidising customers. Another classic red flag is the buzzword overdose. When a company starts describing itself as a tech-enabled omnichannel disruptor leveraging AI and community commerce, it usually means they sell something very traditional, just with Wi-Fi. In the startup world, the more complicated the language, the simpler (and weaker) the actual business. Retail investors often mistake vocabulary for value.
Then there’s grey market fever, perhaps the most dangerous pitfall of all. The Grey Market Premium (GMP) has become the gossip currency of IPO season. It’s unregulated, often speculative, and as reliable as a weather forecast on April Fool’s Day. A soaring GMP doesn’t mean the company is worth more; it just means there’s more noise. Retail investors chasing GMPs are like gamblers betting on the colour of the roulette wheel, not the odds behind it. Watch also for celebrity validation and media choreography. If the company’s marketing spends more on brand ambassadors and PR than on explaining its margins, that’s a red flag in neon. Remember, good businesses don’t need influencers to sell financials.
And finally, the most dangerous pitfall of all, the listing gain myth. Everyone enters thinking they’ll exit on day one. But not every IPO pops; some fizzle quietly, others crash spectacularly. By the time reality sets in, the institutional investors have moved on, and retail shareholders are left clutching their long-term conviction. It’s not conviction; it’s denial with a demat account. The golden rule of IPO investing remains brutally simple: If you can’t explain how the company actually makes sustainable profits, you’re not investing, you’re donating. The IPO market rewards patience, discipline, and scepticism, three traits that vanish the moment a new unicorn rings the bell at the BSE.