03-08-2025
Lenskart leans into small-town India as IPO nears
Mumbai: As India's largest eyewear retailer prepares for a public listing, Lenskart is placing a sizable bet on physical retail in smaller cities and towns—banking on lower rents, brand white space, and early-mover advantage to offset rising lease liabilities and growing metro competition.
Offline retail now contributes around 75% of Lenskart's revenue, and store distribution has shifted in favour of smaller markets.
As of FY25, the company had 698 stores in tier‑2 and beyond, 469 in tier‑1 cities, and 900 in metros—categories defined separately in its draft red herring prospectus (DRHP). Metros include India's largest cities such as Delhi, Mumbai, and Bengaluru; tier‑1 covers secondary but sizable cities like Jaipur, Lucknow, and Indore; tier‑2 and beyond span smaller towns and rural locations.
These smaller markets now account for 34% of Lenskart's domestic footprint, up 45% from 483 stores in FY23, according to the DRHP.
Betting on lower burn, faster breakeven
Lenskart's expansion push reflects a broader shift in the geography of Indian consumer demand.
India's smaller towns are becoming more viable retail markets, driven by rising incomes and digital adoption. Rural and semi-urban India now contributes nearly 47% of GDP, according to a joint study by the RBI Innovation Hub and Boston Consulting Group, while digital payment adoption has reached 30% in these regions, according to a Bain–CII study.
For Lenskart, the opportunity lies not just in demand, but in cost advantage and competitive white space, analysts say.
'Tier-2 locations offer rents that are sometimes 40–60% lower, so reaching breakeven in these markets is faster than tier-1," said Varma.
'Almost 75% of their sales come from offline stores, and at least 75-80% of their orders are below ₹10,000, with around 60% falling in the ₹2,000 to ₹10,000 range — that's their main pricing band," said Satish Meena, co-founder, Datum Intelligence. 'These are markets where branded retail options are still sparse, and Lenskart sees white space."
'In metros, on the other hand, the market is getting more competitive," Meena added. 'There's a clear trend of premiumization — customers willing to spend ₹10,000 and above often look to global brands, which makes it tougher for Lenskart to stand out."
'In metros, on the other hand, the market is getting more competitive," Meena added. 'There's a clear trend of premiumization — customers willing to spend ₹10,000 and above often look to global brands, which makes it tougher for Lenskart to stand out."
Expansion meets expense
Lenskart has added 1,215 stores over the past two years, expanding its footprint by 81%. It began FY23 with 1,508 stores and ended FY25 with 2,723, which includes its international stores. In FY25 alone, it opened 445 new stores and closed 111, resulting in a net addition of 334 stores. Store closures remained modest across all years—67 in FY23 and 59 in FY24.
That expansion is showing up in its rent bill.
Lease expenses more than doubled from ₹595 million in FY23 to ₹1,398 million in FY25. Total lease liabilities stood at ₹22,268 million as of 31 March 2025, up 54% over two years. Rent remained a modest 2.1% of total expenses, but the jump signals growing fixed costs associated with its aggressive offline rollout.
Other players in the organized eyewear segment are also expanding, though with varying strategies.
For instance, Titan Eye+, the eyewear business of Titan Co., generated ₹796 crore in revenue in FY25, up 10% from the previous year, and reported ₹85 crore in segment profit before finance costs and taxes, according to Titan's FY25 annual report. The company operates over 900 stores across 350 cities.
It resumed offline expansion in mid-2024 and launched a premium format, Runway, for sunglasses. However, Titan said in its report that 'E-commerce is the second most important driver of business for the EyeCare Division," as it targets up to a 10% market share in premium eyewear.
Moreover, while online discovery of eyewear has increased, especially among younger, urban consumers, prescription purchases remain largely offline.
As of FY25, digital channels contributed less than 5% of Lenskart's prescription eyeglasses sales, due to friction points like lack of tactile trial and imperfect digital try-ons.
The company's offline stores now span 1.65 million sq. ft. nationwide, generating an average annual revenue of ₹23,492 per sq. ft. in FY25.
IPO in sight
Lenskart is planning to raise ₹2,150 crore in fresh capital through its public offering, while existing investors are looking to sell 132.3 million shares via an offer for sale. The company is reportedly targeting a valuation of $8–9 billion.
In FY25, Lenskart posted ₹6,652 crore in operating income, up from ₹5,427 crore a year earlier. It swung to a net profit of ₹297 crore after a ₹10 crore loss in FY24.
Organized eyewear retail penetration in India remains relatively low at around 24%, according to Redseer's FY25 report Industry Report on the Eyewear Market. Local unbranded stores still dominate the segment, leaving significant room for branded expansion.
Queries sent to the company did not elicit a response until press time.
