Lenskart Solutions Ltd shares declined on Friday morning following the execution of a significant block deal at market open. According to CNBC-TV18, 12.9 crore shares worth ₹5,830.6 crore changed hands in the block deal window, representing 7.07% of the total equity. The transaction was executed at an average price of ₹480 per share, with the deal size initially planned at ₹5,650 crore before being upsized to ₹5,830.6 crore on Friday morning. The selling shareholders included Birdseye View Holdings, TR Capital Mauritius, ABG Capital, and Kariba Holdings, who were looking to exit the company. Alpha Wave, another seller, will have a 90-day lock-in period to sell any further stake, as per CNBC-TV18 sources. The block deal price represented a 3.6% discount to Thursday's close of ₹492.4. Based on Lenskart's March quarter shareholding, Alpha Wave has close to 7% stake in the company, while Birdseye View Holdings holds 1.92%.
The stock opened at ₹477 on the NSE and touched an intraday low of ₹473.40 before recovering to trade around ₹496.25, representing a 1.74% gain as of 9:49 am. As reported by The Hindu BusinessLine, traded volume had surged to 335.87 lakh shares, with traded value crossing ₹1,617 crore by that time. However, shares of Lenskart Solutions Ltd ended at ₹488, down by ₹15.15, or 3.01%, on the BSE on May 7, reflecting the market's reaction to the block deal announcement. The stock had ended 2.2% lower on Thursday at ₹492.4, as markets had already begun pricing in the supply overhang.
The block deal coincided with the expiry of the six-month IPO anchor investor lock-in period, creating additional supply pressure. According to Nuvama Alternative & Quantitative Research, the six-month IPO lock-in ended with 1,047.4 million shares becoming eligible to be traded, amounting to 60% of the company's outstanding equity. Based on Thursday's closing price, the value of shares freed up was worth ₹51,573 crore. However, the end of the lock-in period does not mean all shares will be offloaded; they only become eligible for trading. It must be noted that the end of the shareholder lock-in does not mean all shares will be sold in the open market. They only become eligible to be traded.
Brokerage firm HSBC had initiated coverage on the stock in March with a 'hold' rating and a target price of ₹513. According to HSBC, Lenskart's backward-integrated model and direct-to-consumer approach as key strengths, creating a strong competitive moat in the consumer segment. The brokerage expects Lenskart's revenue and EBITDA to grow at a CAGR of 23% and 49% respectively over FY25-FY28, with improving margins across both domestic and international operations. However, HSBC flagged that elevated valuations relative to peers may cap near-term upside. According to Bloomberg data, 16 analysts track the stock, of which 12 have a 'buy' rating, three recommend 'hold', and one has a 'sell' call.
