My article on Lenskart saved $2 Billion (~₹18,000 Cr) for Indian retail investors. Here's how

It seems like my article on Lenskart has saved $2 Billion (~₹18,000 Cr) for Indian retail investors. While that may sound aggrandising, it’s really not. In all ways, it’s quite an accurate characterisation of this story.

When Lenskart’s IPO news first came out, it was looking at a $10B valuation. Surprisingly, nobody in media or the Indian startup ecosystem saw it as crazy. But I certainly did. I waited for someone to point out the ludicrosity of the whole speil (after all, this is not my job), but nobody did. That’s when I sat down and did a very thorough analysis on Lenskart, studying the company from a macro and even micro lens.

What I found was simple. The company was really going overboard in its bid to juice out the retail investors. It was getting greedy. And with fundamentals in focus, the $10B valuation was - for the lack of a better word - a loot. There was no reason why the company would be valued anything beyond $4-5B, maybe $6B, if things were really hot. But $10B? That was just a way to make sure that the Average Aakash lost about half of his wealth (and his undies) at the slightest hiccup of the market, whenever it happens.

And so I wrote, “Lenskart is another Paytm. Here’s why”.

At first, my article was suspiciously censored on Linkedin. But thanks to my reach on Substack and over 20,000 people in the mailing list, it caught fire and reached everywhere.

The analysis got about a million hits in total, reaching far and wide in the world of business and finance. People in VC, Private Equity, Debt, AMCs, their subscribers, and even management professors. They all read it. It got so much love that some folks who read the piece went out of their way to donate money to me (the essay fetched donations of over ₹50,000 in all). It got so popular that I heard my neighbour’s dog got a new girlfriend because of it.

But despite the analysis (which was only based on fundamentals, not insinuations) finding such support, the media play was still bullish on the IPO. They said something like, “While there are reports that the company may be overvalued, we believe it has all the reasons to be right up there.”

Reading that, I doubled down on my thesis and wrote that if Lenskart goes public at that valuation, I’ll personally place a short on the stock, putting my money where my mouth is. A lot of people came to support by saying that they’d cancel their Mutual Fund subscriptions if they find that those people were participating in this round.

And now, the company has brought its value down by 20%. ₹18,000 Cr saved. Gareebi gayi, khush-haali aayi. Accha laga.

But is Lenskart overvalued, still? Sure. But the downside risk is capped at about 30%. It would’ve been nice if it went public at the valuation Fidelity has marked for it, i.e. $6B. That would’ve been in the fair range. And if the company would’ve grown in value from that point, retail investors would’ve benefited from it (as it happened with UC and Ather). But that’s okay.

Small win.

Lenskart has marked its IPO valuation down from $10 Billion to $8 Billion.

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