PhysicsWallah Nears IPO, Plans to Raise ₹3,820 Crore

Leading edtech unicorn PhysicsWallah is reportedly on the verge of launching its Initial Public Offering (IPO), with plans to raise around ₹3,820 crore. According to a Bloomberg report, the company, backed by WestBridge Capital LLP and Hornbill Capital Partners, has engaged with potential investors, suggesting the offering could be initiated in the coming weeks. The proposed IPO structure includes a fresh issuance of equity shares valued at ₹3,100 crore and an offer for sale (OFS) by current shareholders, including founders Alakh Pandey and Prateek Boob, totaling ₹720 crore.

PhysicsWallah intends to utilize the proceeds from the fresh issue for several key areas: ₹710 crore is earmarked for marketing initiatives, ₹548 crore for lease payments for its existing offline and hybrid centers, ₹460 crore for capital expenditure on establishing new centers, and ₹471 crore for investment in its subsidiary, Xylem Learning Pvt Ltd. The platform caters to test preparation and upskilling courses, reporting 44.6 lakh paid users in FY25 and a robust growth rate, with a Compound Annual Growth Rate (CAGR) of 59% between FY23 and FY25.

This IPO move targets a valuation of nearly $5 billion for PhysicsWallah, a significant jump from its $2.8 billion valuation following a $210 million funding round in September 2024. The company reported revenue of ₹1,940 crore and a net loss of approximately ₹1,130 crore in FY24. Kotak Mahindra Capital, Axis Bank, and the local arms of JPMorgan Chase & Co. and Goldman Sachs Group are advising the company on this share sale.

Impact: This IPO is a significant development for the Indian Edtech sector, potentially boosting investor confidence and encouraging other unlisted companies to explore public markets. It will provide PhysicsWallah with substantial capital for expansion, enhancing its competitive position. Rating: 7/10