22 mutual funds backed Lenskart’s steep IPO: One investor is asking why

An eyewear IPO at 12x revenue. A profit boosted by one-off gains. And yet, 147 anchor investors, including half of India’s mutual fund industry, lined up without hesitation. 

That’s the scene around Lenskart’s public offering, and it’s triggered sharp criticism from investors.

SoftBank Group, Abu Dhabi Investment Authority, Premji Invest, and Kedaara Capital-backed Lenskart Solutions raised ₹3,268.4 crore from 147 anchor investors on October 30, ahead of its public IPO launch. 

Among those onboard: 22 mutual fund AMCs, a level of institutional participation that stunned LKR Investors founder Lalit Rathi.

“Half of India’s fund industry queued up for an IPO at obscene valuations,” Rathi posted on X. “A company at 12x revenue — and every one of these so-called ‘valuation-conscious’ fund managers jumped in without hesitation.”

Rathi’s post didn’t hold back, accusing fund houses of abandoning core investing principles for visibility. 

“Tomorrow, they’ll sit on panels lecturing retail investors about discipline, margin of safety, and long-term investing. But when the hype train rolls in, principles vanish faster than logic.”

He dismissed arguments about low exposure, often cited as justification for participation. “It’s just a 0.01% allocation? Sorry, that’s not an argument, that’s an excuse.”

Lenskart, which operates over 2,800 stores globally and leads India’s prescription eyewear market by volume, reported a net profit of ₹297.3 crore in FY25 — a sharp turnaround from losses in prior years. 

But much of that profit came from non-operating income, while core metrics tell a tougher story. EBIT margins stand at just 2.6%, interest outgo devoured 83.6% of operating profits, and lease liabilities ballooned past ₹1,700 crore.

Yet, the IPO — priced at a staggering P/E of 235 — is drawing heavy institutional interest. By contrast, Titan Company’s eyecare division, with an EBIT margin of 10.6%, trades at a P/E of 89.68.