Lenskart, the omnichannel eyewear unicorn, has taken a significant step toward its initial public offering (IPO) by appointing Kotak Mahindra Bank and Morgan Stanley as lead bankers for its potential Mumbai listing this year. This development marks a crucial milestone in the company’s journey from a startup to a publicly-traded entity.
According to sources familiar with the matter, the company is actively working to expand its roster of investment bankers as it targets an ambitious pre-IPO funding round of approximately $1 billion. The move comes at a time when India’s startup ecosystem is showing renewed interest in public markets, despite global economic uncertainties.
“The appointment of established names like Kotak Mahindra Bank and Morgan Stanley signals Lenskart’s serious intent about going public,” says Karthik Reddy, Managing Partner at Blume Ventures. “This could potentially set a precedent for other consumer-tech companies in India’s retail space considering the public markets route.“
The IPO preparations come on the heels of Lenskart’s strong financial performance and expansion initiatives. The company recently reported a revenue of ₹1,502 crore in FY22, marking a 66% growth from the previous year. More significantly, it managed to narrow its losses by 55% to ₹102 crore during the same period, demonstrating improving operational efficiency.
The timing of this IPO move is particularly relevant for Tamil Nadu’s startup ecosystem, as Lenskart operates several retail outlets and has a significant presence in the state. The company’s success story could inspire local startups, especially those in the direct-to-consumer (D2C) space, to consider similar growth trajectories.
For Tamil Nadu’s retail-tech startups, Lenskart’s IPO journey offers valuable insights into scaling operations while maintaining profitability. The company’s omnichannel approach, combining online presence with physical stores, has proven particularly effective in tier-2 and tier-3 cities, a model that many Tamil Nadu startups are working to replicate.
“Lenskart’s potential IPO could be a watershed moment for India’s D2C sector,” notes Dr. Sailesh Krishnan, Professor of Finance at IIT Madras. “It will provide valuable benchmarks for valuations and set standards for governance that will benefit the entire startup ecosystem, particularly in regions like Tamil Nadu where retail-tech is growing rapidly.”
The company’s recent fundraising activities have also been noteworthy. In 2023, Lenskart raised $500 million from a consortium led by Abu Dhabi Investment Authority (ADIA), valuing the company at $4.5 billion. This strong backing from institutional investors could potentially boost investor confidence in the upcoming IPO.
The public listing could have broader implications for Tamil Nadu’s startup funding landscape. Success could encourage more global investment banks to look closely at opportunities in the region, potentially benefiting local startups seeking growth capital. Additionally, the expertise gained by local financial institutions through this process could help streamline future IPOs from the region.
Lenskart’s focus on technology and innovation, including its recent investments in AI and manufacturing automation, aligns well with Tamil Nadu’s push to become a technology hub. The company’s success could help attract more tech-enabled retail startups to the state and foster innovation in the retail sector.
Looking ahead, the IPO could set new benchmarks for startup valuations and provide a template for other consumer-tech companies planning to go public. For Tamil Nadu’s startup ecosystem, this could mean increased attention from global investors and better understanding of the path to public markets.
