Lenskart IPO: From Founder-Led Startup to a Public Company

I. Introduction

Lenskart Solutions Limited, founded in 2010, is best known for its founder and Shark, Peyush Bansal, who is today renowned for its unique IPO at an $8 billion valuation. As an Indian-founded and technology-driven eyewear company that operates on an omnichannel business model, it currently has more than 2000 stores across India and above 600 abroad. This makes it one of the biggest IPOs so far, with millions of customers across online and offline stores.

The IPO will include a Fresh Issue, where new capital will be added to the company for growth and expansion, and an Offer for Sale [“OFS”] by early investors and promoters will provide some liquidity for early stakeholders. This balance shows that while the business will need a lot of capital for growth, early investors will also want some cash back. The subscription period for the offering ran from October 31, 2025, and ended on November 4, 2025, with allocation on November 6, 2025. After this, Lenskart will be listed on the National Stock Exchange [“NSE”] and Bombay Stock Exchange [“BSE”], marking its move from a founder-led startup to a public-listed company.

However, this transition faces close examination. The company must handle several challenges related to its market value and growth, and importantly, its internal structure and organisation. At this point, the company needs to decide on its board structure and composition, alongside shareholders’ stakes and stock-based pay systems. The relationship between these three governance areas will determine whether an IPO launch signifies a significant shift towards value or if it is merely a temporary market occurrence.

II. Phase I: Compliance and Control

The main change required is the procedural shift from a private to a public company. The following are the key statutory and procedural changes that Lenskart was required to undertake upon its conversion into a public company.

1. Statutory and Procedural Compliance

The Company had to remove the word “Private” from its name to comply with Section 13 of the Companies Act, 2013. Additionally, it had to take necessary steps under the Act. This includes obtaining shareholder approvals through a special resolution, restructuring the company board to meet governance standards, amending the Articles of Association [“AOA”] and Memorandum of Association [“MOA”], and completing other regulatory tasks with the Registrar of Companies [“ROC”]. Furthermore, as a listed company, it must adhere to higher governance standards prescribed under SEBI’s Listing Regulations. This includes establishing an Audit Committee, required as per Section 177, and a Nomination and Remuneration Committee [“NRC”] as mandated under Section 178.

2. Internal Financial Control and Liability Shift

Apart from these procedural steps, the major challenge would be aligning and restructuring the boardroom and internal governance structure as per the obligations of being a listed entity. This transition would entail an enormous review of the financials of the company. Although compared to the Sarbanes-Oxley Act of the US, it would be noted that in India, it is necessary for listed entities to adhere to and disclose Internal Financial Controls. It would be necessary for the Board and the Audit Committee to be the last checkpoint against any misrepresentation and fraud.

The liability pattern also changes. A private company’s liability pattern would normally be limited to the founders and major shareholders. However, as a listed company, there would be joint as well as personal liability on the part of the independent directors, whole-time directors, and key managerial personnel [“KMPs”] with regard to compliance matters, particularly financial discrepancies within the prospectus.

Moreover, the NRC should develop an appropriate succession plan with regard to the CEO and KMPs. Thus, no matter what changes occur with regard to the leadership of the company, the business would remain stable. The failure to develop such a plan will make an organisation vulnerable to risks that institutional shareholders will actively monitor.

III. Phase II: Reforming the Boardroom

1. The Board Size and Decision Making

A critical question that arises when any company enters the public market is how its board should be restructured. Initially, as a startup, Lenskart relied on founder-driven decisions and strategies. Therefore, adjusting to a larger board with enhanced external oversight may create both opportunities and challenges for an omnichannel model which relies on operational agility and quick responsiveness.

The initial board included its co-founders, Peyush Bansal, Neha Bansal, and Amit Chaudhary. It has been expanded to meet the requirements for public listing. Lenskart appointed two new Independent Directors [“IDs”], Ashish Kashyap and Sayali Karanjkar, to its board in compliance with Section 149(4) of the Companies Act, 2013, which mandates that at least one-third of the board must comprise independent directors.

While these changes bring a breadth of new experience and expertise to the board, they might weaken the decision-making process due to a clash of opinions and coordination challenges between founder-driven entrepreneurialism and investor-driven governance. However, major decisions which were initially taken unilaterally by the founders may now require shareholder approval by way of special resolution under Section 180, thereby shifting the board’s approach from founder-led decision-making to one that is increasingly shaped by investor oversight and statutory requirements.

2. Effectiveness of Independent Directors

The appointment of the two new IDs is a statutory requirement; however, it is not sufficient for good governance. Their role must be active in all domains, particularly in monitoring Related Party Transactions [“RPTs”]. The true test of an ID lies in its ability to connect the interests of the founders and shareholders. This is especially important when making decisions about valuation promoter transactions.

IV. Phase III: Incentive-Based Compensation and Ethical Governance

1. Executive Remuneration and Fiduciary Duty

The Employee Stock Ownership Plan [“ESOP”], performance bonuses and structured founder payouts are a few examples of the incentive-based pay method followed by the company. It is viewed not only as rewards but as tools that influence corporate behaviour.

Lenskart’s Draft Red Herring Prospectus [“DRHP”] and Red Herring Prospectus [“RHP”] disclose an increase in the ESOP pool and employee discounts in the IPO. This is crucial for retaining high-growth talent.

At the executive level, filings have shown that there has been an increase in the remuneration of the founders, with Mr Bansal’s income rising to around Rs 5.8–6 crore, and the other co-founders at approximately Rs 3 crore. Such disclosures are standard for public companies under Section 134 of the Companies Act, where board reports must provide a comprehensive overview of managerial remuneration and Section 197, which restricts excess remuneration without proper approvals.

However, Lenskart needs to ensure that an overly aggressive ESOP pool cannot dilute the ownership percentage of the public shareholders in the future, leading to a dilution risk. This must be managed by the NRC, ensuring that the ESOP scheme is linked to performance that benefits all shareholders, not just time-based criteria.

2. The Founder’s Pre-IPO Share Acquisition

A significant governance concern attracting public scrutiny in Lenskart’s IPO journey was the founder Peyush Bansal’s acquisition of over four crore shares in July 2025 at approximately Rs 52 per share, spending around Rs 221 crore, three months before the filing of the RHP. By the time of the IPO, the shares were valued at Rupees 382–402, resulting in a profit of nearly Rs 1,500 crore. While these actions are legally permissible and primarily carried out to buy back shares from the early investors, the timing raises questions about legitimate corporate governance and fiduciary duties of directors under Section 166(2), which obligates them to act in the best interest of the company and its stakeholders, especially concerning minority shareholders.

• Related Party Transaction: The transaction, although conducted with erstwhile investors, raises governance concerns because if a controlling promoter enters such high volumes of transactions immediately prior to the public listing, it is taken into account that such a transaction has had a beneficial effect on the promoter because of the preferential information available to them prior to the IPO. These transactions are required to be in accordance with the provisions of Section 188 of the Companies Act and SEBI (Listing Obligations and Disclosure Requirements) Regulation 23.
• SEBI’s Issue of Capital and Disclosure Requirements [“ICDR”] Regulations, particularly Regulations 16, 17 and 23, state that any of these transactions must be disclosed transparently by the companies so that all relevant facts are available for public knowledge before any investment decisions are taken.

The timing of Mr. Bansal’s acquisition, benefiting from the eventual IPO, raises questions about the integrity and fairness of the internal valuation process and whether the price was manipulated to suit the founder’s personal interests. Such conduct, while technically legal, undermines the Doctrine of Full and Fair Disclosure. It creates an informational advantage for a few before the IPO, which harms the public’s view of the IPO’s fairness.

V. Phase IV: Shareholder Activism and ESG Compliances

As Lenskart enters public markets, shareholders’ voices become a key factor. It is important to note that shareholder activism goes beyond holding the company financially responsible. It also holds the company ethically and sustainably accountable for any damages from its operations.

1. Shareholder Activism in the Indian Tech Context

Shareholder activism appears in voting, open letters or proxy battles as a way to balance managerial power. After its IPO, Lenskart’s structure still favours the promoters. The founders hold significant shares while major institutional investors own the rest. This setup can concentrate power among promoters and limit the influence of minority shareholders. However, high-growth tech IPOs like Zomato and Paytm have shown that the initial investor excitement can quickly turn to scepticism if the company’s performance declines, especially when it is not profitable.

The significant ownership of major venture capital funds, like SoftBank Vision Fund, Temasek Holdings and Kedaara Capital, can be seen as an “active catalyst” for Lenskart through their investment. Additionally, the completion of their combined lock-in period paves the way for them to push Lenskart to make strategic decisions. This would result in achieving short-term profitability by selling assets instead of committing to long-term growth, which was the goal of the business plan presented at the time of investment.

If Lenskart’s performance after the IPO doesn’t match its valuation, public discussions about its overinflated valuation will likely result in shareholders attempting to push for change at the board level or a strategic shift for the company. The same can be done by requisitioning extraordinary general meetings [“EGMs”], to vote on key resolutions. Furthermore, under Section 245 Companies Act, 2013 group of shareholders can raise legal action, called Class Action Suits, against the company, directors or any other member of the Company, if they find that acts are being conducted against the interests of the company.

2. ESG and CSR Compliances

Shareholder activism in a multinational corporation like Lenskart extends beyond financial metrics to ethical and sustainability standards. Lenskart, with its global chains and manufacturing units, is exposed to scrutiny over labour standards, data privacy, and sustainable sourcing while following the principles of Environmental, Social and Governance [“ESG”] metrics. Not complying with the same would yield a violation of the Corporate Social Responsibility Rules [“CSR Rules”] as well as SEBI’s mandate through the Business Responsibility and Sustainability Reporting [“BRSR”] framework. Under Principle 1 (Ethics and Transparency), Principle 5 (Employee Well-being) and Principle 8 (Consumer Privacy) are a few of the governance challenges Lenskart faces under the BRSR framework.

Furthermore, Lenskart’s valuation is heavily dependent on its ability to comply with the data privacy regulations like the Digital Personal Data Protection Act, 2023. A data breach of any extent will pose an immediate or direct threat to its reputation, far exceeding the traditional retail risk.

VI. Conclusion

Lenskart’s debut at the stock exchanges opened at a price below its issue price, despite the strong demand seen during the IPO process. This is a common occurrence for highly valued tech IPOs that trade on futuristic growth rather than current profitability.

However, the long-term impact of the company still remains strong, as the eyewear market continues to grow. The future growth depends on how the company expands overseas, the management of the shareholders and their decisions, while following all the regulations required by a publicly listed company. It is therefore important to keep in mind that Lenskart is no longer just accountable to its founders, but it is now under a lot more supervision by SEBI, other regulatory bodies, and the general public at large. The governance decisions made in the years following the IPO will determine whether its $8 billion valuation was justified by sustained value creation.