- PhysicsWallah will spend Rs 700 crore on marketing over three years for IPO growth
- Marketing spend is 7-8% of budget, below industry average of 30-40% in education sector
- Funds target expansion in southern India, including Andhra Pradesh and Telangana markets
Ed-tech firm PhysicsWallah Ltd will spend over Rs 700 crore on marketing expenses, which will take up the largest chunk of spends as the company looks to raise over Rs 3,400 crore through its initial public offering.
The company plans to spend this Rs 700 crore over a span of three years, co-founder Alakh Pandey told NDTV Profit.
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"In India, the budget for marketing expenses is equal to about 30–40% for the education sector. However, in our case it's just 7–8%," Pandey said while explaining the breakdown. "A lion's share of this amount will go towards expanding our operations in the south."
PhysicsWallah currently operates its southern presence through its own outlets, its application and subsidiary Xylem.
"Last year, we commenced operations in Andhra Pradesh, which is about 6% of the total market. About 18% of the students are from Telangana," Pandey said. "“This fund will also be utilised towards conducting paid campaigns and events in these states."
Apart from the fresh issue, the company's two founders, Pandey and Prateek Maheshwari, will also sell a part of their stake to raise Rs 380 crore through an offer for sale. Both founders own over 80% stake in PhysicsWallah.
The IPO opens on Nov. 11 and has a price band of Rs 103–109 per share. The ed-tech firm is set to get listed on Nov. 18.
In the April-June period, the company reported a net loss of Rs 127 crore, compared to about Rs 72 crore a year ago. Total income during this period stood at Rs 905.41 crore, up 37% year-on-year.
Known as the 'Physics guy', Pandey doesn't hold a formal degree. He pursued Bachelor's degree in Mechanical Engineering at Kanpur's Harcourt Butler Technical Institute, but dropped out in the third year to pursue his passion for teaching. Meanwhile, Maheshwari joined PhysicsWallah in 2020 to look after its strategy and innovation initiatives.
Founded in 2016, PhysicsWallah is an Indian ed-tech company that provides educational courses at affordable rates.
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