Current IPO of Meesho and Lenskart - No learnings from Nykaa fiasco

Last 6 weeks there has been extensive media coverage on the current “darlings” of Financial markets in India - Meesho and Lenskart. It has set me out to review the business narratives, disclosures, growth logic, and unit economics. The findings point to material disconnects between market perception and economic reality. I would like to hold the Merchant Bankers and Independant Directors a bit more responsible.

The central concern:

Both companies appear to be valued on aggressive future assumptions that may not withstand real-world operating pressures.

A quick tabulation on both these companies and then I will dive into common reservations on them:

Meesho — Growth at Any Cost?		Lenskart — The Premium That Looks Paper-Thin
Meesho’s real competitors are not other startups. They are Amazon, Flipkart (Walmart), Reliance’s JioMart and Shopsy (Flipkart). Each has deeper distribution networks and balance sheets. Meesho may be fundamentally a discount arbitrage engine rather than a sustainable marketplace		Lenskart’s perceived premiumization may be a marketing narrative, not durable economics. If sentiment shifts, valuation may compress dramatically. Lenskart looks like a conventional retailer priced as a disruptive technology company.

Common Structural Weaknesses

Both companies show patterns often seen in over-promoted IPOs:

Þ    Narrative-driven valuation

Þ    Dependence on idealized growth assumptions

Þ    Limited operating margin buffers

Þ    Hyper-competitive market environments

Þ    Low switching cost for consumers

Þ    No durable technological or IP-based barrier

Advice on Red Flags for Investors to Monitor

Watch for these signals post-IPO:

Æ     dropping order volumes when discounts weaken

Æ     rising customer acquisition cost (CAC)

Æ     increasing seller churn (Meesho)

Æ     slowing same-store sales growth (Lenskart)

Æ     inventory write-downs or SKU obsolescence

Æ     margin compression disguised as “investment in growth”

If any of these emerge, the bullish narrative may unravel.

Conclusion

Review raises concerns that:

• Meesho’s growth may be subsidized, not earned, and profitability remains speculative.

• Lenskart may be priced for perfection, but operates in a commoditized retail category with a shallow moat.

Investors should demand:

• audited unit-economics transparency

• cohort-wise profitability disclosures

• store-level performance reporting (for Lenskart)

• subsidy-adjusted transaction data (for Meesho)

MY CLOSING NOTE:

These are not “bad companies.” They may simply be good companies priced like exceptional ones — and that gap creates asymmetrical downside risk.