- Shares of PhysicsWallah Ltd. rose over 6% after a student lending strategy change
- Stock hit an intraday high of Rs 111.87 with trading volumes four times the average
- Company will partner with third-party NBFCs for student loans, ending direct funding
Shares of PhysicsWallah Ltd. rose as much as 6% on Monday, extending gains seen last week after the edtech company announced a significant change to its student lending strategy.
The stock climbed to an intraday high of Rs 111.87, before trimming some gains to trade around Rs 108.9, still up over 6% from its previous close of Rs 102.73. Trading volumes were more than four times the 30-day average, indicating strong investor interest in the counter.
The rally comes after PhysicsWallah said it would move away from directly funding student loans through its subsidiary and instead partner with regulated third-party non-banking financial companies (NBFCs) to meet students' financing needs.
The company said the decision reverses its earlier approach and is aimed at reducing balance-sheet exposure and credit-related risks. Investors appear to have welcomed the move as it shifts lending risk to specialised financial institutions while allowing PhysicsWallah to remain focused on its core education business.
“We received feedback from our partners that our core strength lies in building communities and our online business. Our lending business is best left to regulated third-party NBFCs who have created robust underwriting capabilities,” said Prateek Maheshwari, Co-founder of PhysicsWallah.
Maheshwari added that prudent capital allocation and shareholder value remain key priorities for the company, prompting it to revisit its earlier lending plans and opt for partnerships with regulated lenders instead.
The announcement marks a strategic pivot for the company. PhysicsWallah had only recently disclosed plans to invest around Rs 120 crore into its wholly-owned subsidiary, FinZ Finance Pvt. Ltd., to build its student lending operations. In its latest exchange filing, however, the company said the future strategy for FinZ Finance will be determined later, subject to board and regulatory approvals.
ALSO READ: PhysicsWallah Shares Soar 18% Intraday — What's Fueling The Rally?
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