PhysicsWallah Files Updated DRHP for Rs 3,820-Crore IPO

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News Summary

PhysicsWallah, the Noida-based edtech juggernaut, has officially moved closer to a stock market by files Draft Red Herring Prospectus (DRHP) with SEBI. The company is targeting a whopping ₹3,820 crore through its upcoming IPO comprising a fresh equity raise of ₹3,100 crore and an Offer for Sale (OFS) of ₹720 crore. Notably, co-founders Alakh Pandey and Prateek Maheshwari will each offload shares worth ₹360 crore.

This isn’t just paperwork; it’s a defining moment for India’s edtech ecosystem. PhysicsWallah could become the first unicorn from this sector to step onto Dalal Street, potentially setting a benchmark for other startups eyeing public markets. The filing comes on the heels of SEBI’s approval of its confidential pre-filed draft, reflecting both regulatory confidence and a market ripe for the debut.

The DRHP details ambitious plans: the fresh capital will fuel aggressive expansion, tech upgrades, offline and hybrid center growth, marketing campaigns, and strategic acquisitions. Key allocations include ₹460.5 crore for offline/hybrid learning centers, ₹548.3 crore for lease obligations, ₹47.2 crore for Xylem Learning, ₹33.7 crore for Utkarsh Classes, and ₹26.5 crore to increase stakes in Utkarsh. With Kotak Mahindra Capital, JP Morgan India, Goldman Sachs India Securities, and Axis Capital managing the IPO, and MUFG Intime as registrar, this listing could redefine India’s digital education narrative.

1. Introduction

From a humble YouTube channel in 2016 to a full-fledged edtech unicorn, PhysicsWallah’s trajectory is nothing short of remarkable. Alakh Pandey’s brainchild started with a focus on affordable JEE prep but rapidly expanded into NEET, GATE, UPSC, and upskilling courses.

The company’s hybrid model—blending online content with offline centers—addresses one of India’s biggest educational gaps: quality, scalable, and accessible learning for aspirants beyond metro hubs. The IPO is more than a capital raise; it’s a statement of ambition, credibility, and a roadmap to evolve from a high-growth startup into a market-listed edtech powerhouse.

2. IPO Details

2.1. Offer Structure

PhysicsWallah’s IPO structure is strategic: aiming to raise ₹3,820 crore, split between:

1. Fresh Issue – ₹3,100 crore in new shares to accelerate growth, tech adoption, and marketing.
2. Offer for Sale (OFS) – ₹720 crore, with Pandey and Maheshwari selling ₹360 crore each.

This dual approach cleverly balances inflow of capital with promoter liquidity—a tactic favored by growth-stage startups preparing to face public scrutiny.

2.2. Utilization of Proceeds

Every rupee has a clear mission:

1. Offline & Hybrid Expansion: ₹460.5 crore for new centers; ₹548.3 crore for existing lease obligations.
2. Subsidiary Investments: ₹47.2 crore for Xylem Learning; ₹33.7 crore for Utkarsh Classes.
3. Stake Increase: ₹26.5 crore for additional holding in Utkarsh Classes.
4. Tech Infrastructure: ₹200.1 crore toward servers, cloud solutions, and learning platforms.
5. Marketing Blitz: ₹710 crore for multi-channel campaigns.
6. Corporate Strategy & Acquisitions: Remaining funds for strategic acquisitions and general corporate purposes.

This allocation strategy signals a company thinking long-term—prioritizing sustainable growth while staying agile in an intensely competitive market.

3. Company Overview

3.1. Founders and Leadership

Alakh Pandey isn’t just a founder; he’s the charismatic face of PhysicsWallah. His teaching style resonates with millions, making learning feel intimate even at scale. His insistence on quality at affordable pricing set PhysicsWallah apart in a crowded landscape.

Prateek Maheshwari, the operational backbone, manages finances, scaling, and strategic execution. Together, they retain over 80% of promoter shares, signaling not only belief in their vision but also alignment with prospective investors.

3.2. Business Model
PhysicsWallah thrives on a hybrid ecosystem:

• Online Learning: Comprehensive video lectures, interactive live sessions, and self-paced modules.
• Offline Centers: Physical hubs for mentorship, doubt resolution, and personalized guidance.
• Hybrid Programs: A seamless blend of digital tools and in-person support.

Revenue streams include subscriptions, one-off courses, and offline classes, providing resilience against market volatility while enabling experimentation and expansion.

3.3. Financial Performance

The numbers speak volumes:

• Revenue FY25: ₹2,886.6 crore, a 48.7% jump from FY24.
• Net Loss FY25: ₹243.2 crore, drastically reduced from ₹1,131.1 crore in FY24.

With 44.6 lakh paid users and a CAGR of 59% from FY23–FY25, PhysicsWallah proves that high-quality, affordable education continues to strike a chord with learners.

4. Industry Context

4.1. Edtech Market Growth

India’s edtech sector is booming, driven by:

• Wider internet penetration and mobile access.
• Rising demand for competitive exam prep in tier-2 and tier-3 cities.
• Government policies favoring digital learning initiatives.

Experts predict the market could surpass $10 billion by 2026, providing fertile ground for companies like PhysicsWallah to simultaneously scale offline and online operations.

4.2. Competitive Landscape

PhysicsWallah competes with established players:

• BYJU’S: K–12 and competitive exams.
• Unacademy: Extensive educator network with live sessions.
• Vedantu: Live tutoring with interactive mentorship.

Yet, PhysicsWallah’s edge lies in affordability, hybrid delivery, and penetration into underserved cities—an area where bigger competitors often struggle.

5. Risks and Considerations

Challenges persist despite strong momentum:

1. Profitability: Losses are narrowing, but steady profits remain elusive.
2. Subsidiary Performance: Units like Xylem Learning and Utkarsh Classes are still dependent on ongoing support.
3. Intense Competition: Well-funded rivals could threaten market share.
4. Regulatory Changes: SEBI or edtech policy shifts may impact operations.

Investors must weigh these risks against the rare opportunity to participate in a high-growth unicorn’s journey.

6. Future Outlook

IPO proceeds are poised to:

• Expand offline & hybrid centers into smaller cities.
• Upgrade cloud and server infrastructure for seamless online experiences.
• Boost brand visibility through aggressive marketing campaigns.
• Pursue strategic acquisitions to diversify and consolidate offerings.

A successful IPO would not only validate PhysicsWallah’s model but also light the path for other edtech unicorns eyeing public listings.

7. Learning for Startups and Entrepreneurs

PhysicsWallah is more than a story of capital; it’s a blueprint for founders:

• Innovative Delivery: Online-offline integration isn’t just clever—it reshapes the ecosystem.
• Audience Understanding: Affordability and accessibility trump flashy features.
• Disciplined Scaling: Growth coupled with shrinking losses shows strategy, not recklessness.
• Capital Deployment: Each rupee from the IPO is channeled toward sustainable impact—tech, marketing, infrastructure, and acquisitions.

For ambitious entrepreneurs, the lesson is simple: combine vision with strategy, and deeply understand your audience.

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