PhysicsWallah IPO Opens — Should You Apply? Read Anand Rathi's Report For Key Issue Details

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Anand Rathi Report

An Edtech company, founded by Alakh Pandey and Prateek Boob, headquartered in Noida, Uttar Pradesh, PhysicsWallah Ltd. launched its initial public offering today, on Tuesday, November 11 and will conclude on Nov. 13. The company has fixed the price band in the range of Rs 103 to Rs 109 per equity share.

Investors can place bids starting from a minimum of 137 shares and in multiples thereafter, which means it requires minimum investment of Rs 14,933 at the upper limit of the issue price.

The Rs 3480-crore IPO comprises of a fresh issue of 28.44 crore shares, valued at Rs 3,100 crore, and an offer-for-sale (OFS) of 3.49 crore shares, amounting to Rs 380 crore.

Kotak Mahindra Capital Company Limited, J.P Morgan India Private Limited, Goldman Sachs (India) Securities Private Limited, Axis Capital Limited are the book-running lead managers for the public issue while MUFG Intime India Private Limited is the registrar to the offer.

Objects of the Issue:

1. Capex for fit-outs of new offline and hybrid centers.

2. Expenditure towards lease payments of existing identified offline and hybrid centers operated by the company.

3. Investment in their Subsidiaries – Xylem Learning Private Limited, Utkarsh Classes & Edtech Private Limited for capex and lease payments respectively.

4. Expenditure towards server, cloud related infrastructure costs and marketing.

5. Acquisition towards additional shareholding in their subsidiary Utkarsh Classes.

6. Funding inorganic growth through acquisitions and general corporate purposes.

Competitive Strengths:

• They had 4.5 million total paid users in Fiscal 2025, growing at a CAGR of 59.2% between Fiscals 2023 and 2025, and 2.4 million paid users in the three months ended June 30, 2025, driven by their student community-led approach.

• The company has a presence across a large number of education categories in India with courses offered through multiple channels.

• Their proprietary technology-stack enhances students’ learning experience.

• Their ecosystem generates network effects driven by their community-based approach.

• Specialized faculty members across categories, quality content and well-planned curriculum leading to successful results.

Key Strategies:

• Increase student engagement leading to enhanced brand recall.

• Expand and enhance their offerings across multiple Education Categories.

• Develop their multi-channel presence by growing offline and hybrid channels of delivery.

• Scale operations and introducing new value-added services to improve margins.

• Strategically pursuing inorganic opportunities to strengthen their capabilities and broaden their market reach.

Comparison with listed entity

There are no other companies in the education industry of the same size, scale and business model comparable to theirs that are listed in India.

Key Risk:

• Their restated loss for the period/year stood at Rs 1,270.09 million, Rs 718.1 million, Rs 2,432.6 million, Rs 11,311.3 million and Rs 840.8 million for the three months ended June 30, 2025, and June 30, 2024, and Fiscals 2025, 2024 and 2023, respectively. They also reported negative net worth as of March 31, 2024, and negative Ebitda in Fiscal 2024 and the three months ended June 30, 2025. If they are unable to achieve adequate revenue growth and effectively manage expenses and cash flows as they expand, they may continue to incur losses in the future, adversely impacting their financial condition.

• Their success depends on their ability to attract and retain students, and any failure to do so could adversely impact their business, reputation, financial condition, and cash flows.

• Their success depends on their ability to attract and retain faculty members, and any failure to do so could adversely impact on their business, operations, financial condition, and cash flows.

• Their business depends substantially on the continued leadership of their founders (also Promoters), Alakh Pandey and Prateek Boob, along with the support of their management team and employees. Any discontinuation of their services could adversely impact their business.

• Their success depends on their ability to provide updated and relevant content across education categories, and any failure to do so could adversely impact student outcomes, enrolments, business performance, financial condition, and cash flows.

• They incurred losses in Fiscals 2024 and generated profits in Fiscal 2023, Fiscal 2025 and in the three months ending June 30, 2025, and 2024, respectively. If they are unable to generate adequate revenue growth and manage their expenses and cash flows as they grow, they may not be able to sustain their profitability.

• For the three months ended June 30, 2025, 26.6%, 15.6%, 12.3%, and 17.6% of their Number of Unique Transacting Users (Online Channel) were enrolled in courses across NEET, JEE, other government examinations, and Foundation Education Categories, respectively. Their inability to continue offering these Education Categories or to increase enrolments across other categories could adversely impact their operations and cash flows.

• They derive a significant portion of their offline revenue from centers located in Delhi NCR, Patna (Bihar), Kota (Rajasthan), Calicut (Kerala), Lucknow (Uttar Pradesh), and Kolkata (West Bengal). Any failure to expand their network of offline centers could expose them to concentration risks, potentially impacting their business and operations.

• They have entered, and will continue to enter, into related party transactions that may potentially involve conflicts of interest.

• They are yet to identify the exact locations for setting up their new offline centers and have not entered into any definitive arrangements to utilize certain portions of the Net Proceeds of the Offer. The costs to be incurred for such purposes are based on vendor quotations or management estimates.

• Certain subsidiaries — Xylem, Knowledge Planet, and Utkarsh Classes — have incurred losses in Fiscals 2025 and 2024 and in the three months ended June 30, 2025, and June 30, 2024, with negative net worth and earnings per share in the past. A portion of the Net Proceeds will be used to acquire additional shareholding in Utkarsh Classes. Continued losses in these subsidiaries may require further financial support, adversely impacting on their consolidated cash flows and financial condition.

Valuation & Outlook:

Physics Wallah is an Indian edtech company founded by Alakh Pandey and Prateek Boob, headquartered in Noida, Uttar Pradesh. The company provides affordable online and offline education for students in Classes 6–12 and aspirants of competitive exams such as JEE, NEET, and various government examinations.

Starting as a YouTube channel, PW has grown rapidly, building a strong student community with millions of users across its digital platforms and a growing network of offline centers in major Indian cities. Its offerings include live and recorded lectures, doubt-solving sessions, study materials, and test series, with a focus on accessible, low-cost learning.

The company’s hybrid model—combining online scalability with offline reach—has enabled it to become a major player in the Indian education space. In Fiscal 2025, their Total Number of Paid Users reached 4.5 million, reflecting a CAGR of 59.2% between Fiscals 2023 and 2025. For the three months ended June 30, 2025, they recorded 2.4 million Paid Users, up from 1.9 million during the same period in the previous year.

As of March 31, 2025, they offered courses across 13 Education Categories, up from six in 2023, covering school education, competitive exams like JEE and NEET, and professional skill programs in areas such as data science and finance through online, offline, and hybrid modes.

At the upper price band, the company is valued at 10.8x FY25 P/S, implying a post-issue market capitalization of Rs 3,11,699 million. They aim to grow their student community by offering engaging free content across platforms and converting users into paying customers through better technology, targeted marketing, and expert-led high-quality content.

The company plans to broaden its course portfolio and launch new Education Categories in multiple Indian languages to reach a wider student audience. They intend to keep innovating to introduce value-added services that enable upselling of additional offerings at minimal incremental cost.

They plan to expand into new regions and enhance their offerings and tech tools by acquiring strong, studentfocused businesses. Considering these factors, the IPO appears fully priced and is rated “Subscribe – Long Term.

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