Early Lenskart investor Alpha Wave trims stake by 2.5% in open market

Synopsis

Alpha Wave Ventures reduced its stake in Lenskart through a major open market transaction, selling 2.46% holding in the eyewear retailer. Despite the stake sale, analysts remain optimistic on Lenskart’s long-term growth, citing strong revenue potential, operational scale and improving profitability outlook.

One of Lenskart's early institutional investors has pared its stake in the company in open market on Monday. A regulatory disclosure filed with stock exchanges showed Alpha Wave Ventures II LP sold 4.3 crore shares, equivalent to 2.46% stake, in Lenskart through an open market transaction after crossing the 2% disclosure threshold on May 8.

Before the sale, Alpha Wave Ventures II and persons acting in concert together held 12.37 crore shares, or 7.13% stake in Lenskart. Following the transaction, their combined holding has come down to 8.07 crore shares, translating into 4.67% stake in the omnichannel eyewear retailer.

As per the disclosure, Alpha Wave Ventures II's direct holding has dropped from 3.7% to 1.24%, while its affiliate Alpha Wave Ventures LP continues to hold 3.43%.

Based on Lenskart's disclosed equity capital of 173.64 crore shares, the sale of 4.3 crore shares represents one of the larger secondary stake transactions in the company in recent months.

Lenskart is India's largest vertically integrated, technology-led, omnichannel eyewear platform, addressing a structurally underpenetrated eyewear category in India (53% of population impacted, modest 35% penetration).

Lenskart has built strong moats in a difficult-to-scale category through a centralized, highly automated manufacturing facility and logistics network, strong backward integration, which provides significant cost advantage, large omnichannel presence, leveraging technology to ease constraints in scaling up and house-of- brands architecture spanning mass to premium eyewear, to achieve its goal of making quality eyewear accessible and affordable.

Motilal Oswal expects Lenskart to deliver a CAGR of 25%/53% in pro forma consolidated revenue/pre-IND AS EBITDA, largely driven by volume growth, product margin improvement, and 625 bp operating leverage-driven margin expansion over FY25-28 (320 bp over 9MFY26-FY28).

The broker initiated coverage on Lenskart with a Buy rating and a target of Rs 600, premised on DCF-implied 55x FY28E. "Our valuations for Lenskart are at a premium to other leading retailers, but we believe the multiples are justifiable, given Lenskart's superior growth profile, limited organized competition and long growth runway," it said recently.

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