The upcoming Initial Public Offering (IPO) of Lenskart Solutions Ltd. has ignited a fierce debate in India’s financial community, polarizing market pundits and institutional investors. While many analysts have expressed concerns over the company’s aggressive valuation, DSP Mutual Fund, a prominent player, has publicly defended its high-conviction investment in the offering, even acknowledging the steep price tag.
DSP Mutual Fund’s Conviction: A Bet on Fundamentals
In a rare public statement, DSP Mutual Fund (DSP MF) clarified its decision to invest in the Lenskart IPO, emphasizing that its investment thesis is built on three strong pillars: (i) Strong and scalable business, (ii) Trustworthy promoters, & (iii) Demonstrated execution.
DSP MF acknowledged that the valuations are expensive, stating, “On valuations, we believe businesses associated with retail, e-commerce are trading expensive, including this specific business.” The fund house indicated that a perfect alignment of all four of its investment dimensions (including attractive valuation) is rare. They further revealed a calculated move, stating they “trimmed a slower-growing, similarly-expensive position to make room for this investment,” suggesting a portfolio rotation rather than a pure cash deployment. For DSP MF, Lenskart’s vertically integrated, technology-driven omnichannel model and its rapid scale-up (over 2,500 stores globally) justify the investment for the long term.
Update
Usually, we do not comment on individual stocks that may or may not be part of our portfolios. However, given the questions and concerns on social media over the last 24 hours, we felt it is important to share clarity with our investors.
We have always been selective in…
— DSP Mutual Fund (@dspmf) October 31, 2025
The Critics’ Corner: Valuation, Competition, and Promoter Ethics
The dissenting voices on social media and among financial commentators center on several key concerns, primarily revolving around the high valuation and the promoter’s conduct:
- Sky-High Valuation: The valuation for the eyewear retailer, which operates in a highly competitive market, is pegged at an estimated ₹69,700 crore ($8 billion) at the upper end of the ₹382–₹402 price band, with an estimated Price-to-Earnings (P/E) multiple over 200x based on FY25 earnings. Critics argue that such multiples are illogical for a retail business with single-digit margins and that much of the recent profit came from one-time non-operating components. Quant Mutual Fund’s founder, Sandeep Tandon, even publicly criticized the “stupidity” driving Indian investors to pay such unreal valuations.
- Promoter ‘Trustworthiness’: A major point of contention stems from the reported share transactions by the promoter group. Questions were raised about the founder, Peyush Bansal, buying a substantial number of shares a few months before the IPO at a valuation significantly lower than the offer price, allegedly using a loan. While the search results clarify that one of the promoters, Neha Bansal, sold shares to marquee investors like SBI Mutual Fund and Radhakishan Damani in a pre-IPO deal at the offer price, the perception of the founder’s earlier low-cost purchase at a deep discount to the IPO price has fueled skepticism regarding the ‘trustworthy promoters’ dimension, with critics alleging the transactions benefit early investors at the public’s expense.
- Business Headwinds: Beyond valuation, commentators pointed out the risks from a highly fragmented market (unorganized sector dominance) and rapid advancements in alternatives like LASIK and myopia-curing eye-drop technology, which pose a long-term threat to a business primarily reliant on traditional prescription eyewear.
A Retail IPO for the Long Term
Lenskart’s IPO, which opened for subscription on October 31, 2025, is a significant test for the market’s appetite for high-growth, high-valuation consumer-tech companies. The ₹7,278 crore issue is a combination of a fresh issue to fund expansion and a large Offer for Sale (OFS) providing an exit for early investors and promoters.
While the strong initial subscription driven by institutional and retail demand suggests the IPO is likely to be a success in the near term, the fundamental disagreement between value-focused critics and conviction-driven institutions like DSP MF highlights a crucial decision for public market investors: whether Lenskart is an overpriced retailer or a revolutionary consumer-tech platform with global ambitions.
This video provides an in-depth breakdown of the Lenskart IPO and the concerns around its valuation: Lenskart IPO Explained: Is Peyush Bansal Overvaluing His Company? Lokmat Times.
