PhysicsWallah’s Landmark IPO: India’s Edtech Giant Goes Public
In one of the most anticipated IPOs of the year, PhysicsWallah, the popular education platform led by Alakh Pandey, has filed an updated Draft Red Herring Prospectus (DRHP) for ₹3,820 crore. If the IPO goes through, PhysicsWallah will become India’s first edtech unicorn to be listed on Dalal Street, making it a defining moment for the sector.
The IPO consists of a fresh issue worth ₹3,100 crore and an offer for sale of ₹720 crore by its co-founders. Notably, Alakh Pandey plans to sell ₹360 crore worth of shares, marking a significant personal exit while retaining substantial influence.
SEBI Clearance Paves the Way for a Smooth Listing
The Securities and Exchange Board of India (SEBI) cleared the company’s pre-filed draft prospectus in July under the confidential review route. This process allows companies to undergo regulatory scrutiny before publicly announcing their IPO, minimizing last-minute hurdles.
This strategic approach underscores the confidence PhysicsWallah’s leadership has in executing a smooth and successful public offering.
Where Will the Funds Be Used?
PhysicsWallah’s plan isn’t just about raising money—it’s about scaling operations and strengthening its infrastructure for long-term growth. Here’s how it intends to deploy the funds:
- ₹460.6 crore for outfitting new offline and hybrid learning centers
- ₹548.3 crore toward lease payments for existing centers
- ₹47.2 crore invested in its subsidiary Xylem Learning
- ₹33.7 crore allocated to Utkarsh Classes & Edutech, along with ₹26.5 crore for acquiring more shares
- ₹200.1 crore earmarked for server and cloud infrastructure upgrades
- ₹710 crore for marketing campaigns to expand its reach
- The remaining funds will be used for acquisitions and general corporate purposes
This careful allocation of capital shows the company’s focus on both physical expansion and technological innovation.
Promoter Holdings Remain Strong
Even with the share sale, the promoter group retains 82.3% ownership, with Alakh Pandey and Prateek Boob each holding 40.35%. This structure ensures leadership stability and continued influence over the company’s direction.
Among external investors, WestBridge AIF I holds 6.41%, followed by Hornbill Capital at 4.42%, GSV Ventures’ Fund III at 2.85%, Lightspeed Opportunity Fund at 1.79%, and Setu AIF Trust at 1.39%.
Financial Performance Signals Stability
Since its inception in 2016, PhysicsWallah has carved a niche in the test preparation space with offerings for exams like JEE, NEET, GATE, and UPSC. Over the years, it has also expanded into upskilling and hybrid learning formats.
Key figures for FY25 include:
- 44.6 lakh paid users, up from previous years
- 59% compound annual growth rate between FY23 and FY25
- Revenue surged 48.7% to ₹2,886.6 crore
- Net loss narrowed to ₹243.2 crore, compared to ₹1,131.1 crore in FY24
These metrics reflect a company that is not only growing fast but is also becoming more efficient in managing its operations.
Heavyweights Managing the IPO
The IPO is being spearheaded by a team of top financial institutions, including Kotak Mahindra Capital Company, JP Morgan India, Goldman Sachs (India) Securities, and Axis Capital. Their involvement signals strong confidence in PhysicsWallah’s governance, strategy, and growth potential.
Aiming for a $5 Billion Valuation
PhysicsWallah’s last funding round in September 2024 saw it raise $210 million at a $2.8 billion valuation. Now, with this IPO, the company is aiming to nearly double its valuation to around $5 billion, reinforcing its position as a market leader.
Why This IPO Matters
This IPO is more than just a financial event—it’s a turning point for India’s education ecosystem. It highlights:
- The rising demand for affordable and accessible learning solutions
- The growing acceptance of edtech platforms in mainstream education
- The potential for mid-sized companies to scale with the right backing
For investors, this IPO offers a unique chance to back a company with a proven business model, strong leadership, and clear growth strategies.
Final Thoughts
PhysicsWallah’s ₹3,820 crore IPO isn’t just another offering—it’s a landmark event that could redefine the future of education in India. With visionary leadership, strategic capital allocation, and growing demand for learning platforms, the company is set to scale new heights.
For those watching India’s startup space, this IPO is a must-follow. PhysicsWallah is not just growing—it’s shaping the way millions learn and succeed.