Peeyush Bansal has spent the last few years grilling investors on Shark Tank about their company’s prospects and valuations, but he doesn’t seem as keen on valuations when his own company is looking to raise money from the public.
Lenskart founder Peeyush Bansal has been criticized for saying that he doesn’t understand valuations when asked to justify Lenskart’s own valuation at its IPO. “Lenskart’s valuation is significantly higher on price to earnings and price to EBITDA as far as some international peers are concerned,” Bansal was asked at an event. “I wanted to get your view on how you’re justifying this, because 40% of your revenues come from your international businesses,” the person continued.
“Mereko to justify karna hi nahin hota na valuation (I don’t have to justify valuations),” Bansal replied. “For the last 15 years, I’ve only been justifying the valuation for the customer — how to make the best quality spectacles at the lowest price possible. We’ll spend the next 20-30 years building the business in India and abroad,” he said.
“Ye jo valuation hai, mujhe samajh bhi kam aata hai (I don’t fully understand how valuations work),” he smiled. “But it is largely done by strong advisors. I genuinely think that as entrepreneurs it is not our job to determine valuation. But we keep everything ‘value for money’ at Lenskart. My guidance for our advisors is that we should get the best partners on board, and we should make sure that it’s value for money,” he added.
Lenskart is going public at a valuation of Rs. 70,000 crore in its IPO, which effectively implies a trailing PE ratio of 234. But Bansal’s evading of the valuation question raised some eyebrows on social media. “Fair point to not have to “justify valuation” because the market is free & open. But for a seasoned entrepreneur for him to say that he does not “understand” valuation is a bit rich, frankly,” wrote a user on X.
Other also brought up Bansal’s stint as a judge on Shark Tank, saying that he himself wouldn’t have invested in a company with a PE ratio of 234.
Some asked why he’d been judging Shark Tank for all these years when he didn’t understand valuations as he was claiming.
Some people drew comparisons to Paytm’s IPO, which had become the world’s worst-performing large IPO when the stock had crashed 60% a few days after listing. “Heard the same confident talk during #PAYTM IPO once… that stock’s now chilling at 60% of issue price,” wrote an X user.
Some compared his statement with that of Paytm CFO Milind Deora, who had famously said that they’d left some money for retail investors on the table when pricing the Paytm IPO.
Others also pointed out that it was the job of an entrepreneur to justify valuations when requesting the public to fund their companies through an IPO. “You are founder of Lenskart so in case of valuation retailers will ask founder of startup only and not anyone else,” said an X user.
It remains to be seen how Lenskart’s IPO fares, but Bansal’s answer seemed at odds with his persona on Shark Tank. On the show, Peeyush Bansal routinely obsesses over the valuations of the companies he is investing in, and gets founders to justify why they believe that their companies should be valued at the valuations they’re seeking. But prior to Lenskart’s IPO, Bansal doesn’t seem to be as keen on discussing valuations when questioned by retail investors who will be deciding whether or not to invest in his company. Time will tell if this tack pays off, but it does seem disconcerting for a founder to say that he doesn’t fully understand valuations or feels the need to justify them right before an IPO.