Lenskart IPO: Shankar Sharma’s Sarcastic Take on Valuation
Amid fierce chatter over Lenskart’s high valuation ahead of its IPO debut, veteran investor Shankar Sharma has weighed in with a sarcastic take, joking that the company’s valuation is a ‘steal.’ Sharma’s statement comes against the backdrop of growing concerns over Lenskart’s valuation, pegged at around Rs 70,000 crore. Many have pointed out the company’s high price-to-sales multiple exceeding 10x and a high price-to-earnings ratio of 230x.
In a post on X, Sharma mockingly compared Lenskart’s pricing to the sky-high valuations of past tech IPOs, suggesting any criticism was just an ‘organised campaign.’ Shankar Sharma’s investing strategy has always been to look for value in the market, and his comments on Lenskart’s valuation are a reflection of this approach.
Comparison with Paytm and Nykaa IPOs
‘There is an organised campaign against Lenskart. At ~10x Sales, it’s a steal compared to P/ sales valuations of Paytm, Nykaa, Zomato, PB, Car Trade, etc, who IPOd at 25-50x their revenues ( with plenty of losses too),’ Sharma wrote on X. This comparison is interesting, given that Paytm’s IPO was one of the most highly anticipated in recent years, and Nykaa’s IPO was also widely covered in the media.
In addition to Lenskart’s high valuations, market watchers are not particularly happy with the way the management has tried to justify the concerns by simply stating the company’s aim to ‘create value for the customer.’ This approach has been criticized by some as being overly simplistic, and not taking into account the complexities of the market.
Quant Mutual Fund’s Sandeep Tandon Weighs In
In a recent interview with NDTV Profit, Quant Mutual Fund’s Sandeep Tandon has recently called the ongoing IPO fervour a ‘stupidity’, in an indirect reference to Lenskart and other issues, which have opened with steep valuations. Tandon’s comments reflect a broader concern among investors that the current IPO market is overheated, and that companies are being valued at unsustainable levels.
However, Shankar Sharma, who was an early investor in companies like Amazon and Apple, believes Lenskart’s valuations are a bargain, at least in relation to some of the other IPOs that have graced the Indian markets in recent years. ‘Phir Aisa Kya ghor paap kar raha LensKart, bhaiya?’ he quipped, before clarifying that he does not own any shares of Lenskart or ‘any other kart.’
Implications for Indian Investors
So what do Shankar Sharma’s comments mean for Indian investors? On the one hand, they suggest that Lenskart’s valuation may not be as outrageous as some have suggested. On the other hand, they also reflect a broader concern that the current IPO market is overheated, and that investors need to be cautious when evaluating new listings. As Indian stock market trends continue to evolve, it’s essential for investors to stay informed and up-to-date on the latest developments.
In conclusion, Shankar Sharma’s comments on Lenskart’s valuation are a timely reminder that the Indian IPO market is complex and multifaceted. While some companies may be valued at unsustainable levels, others may be undervalued. As investors, it’s essential to approach each new listing with a critical and nuanced perspective, taking into account a range of factors, including technical analysis and fundamental analysis.