Physics Wallah IPO Faces Investor Skepticism: Will This EdTech Giant's Debut Be a Dud?

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Updated on 13 Nov 2025, 05:52 am

Physics Wallah's initial public offering (IPO), aiming to raise Rs 3,480 crore, experienced a subdued response on its third and final day of bidding, November 13. By 11 am, the IPO was subscribed only 16 percent, with bids for approximately 2.95 crore shares against an offer size of 18.62 crore shares. Retail investors showed moderate interest, booking 71 percent of their allocated portion, while Non-Institutional Investors (NIIs) subscribed merely 8 percent. A significant absence of bids was noted from Qualified Institutional Buyers (QIBs).

Ahead of its listing, the Grey Market Premium (GMP) for Physics Wallah's unlisted shares has seen a sharp decline. It traded at less than 1 percent premium over the IPO price, significantly down from previous weeks. This trend reflects cautious investor sentiment.

Brokerage firms provided mixed to neutral outlooks. SBI Securities maintained a 'Neutral' stance, highlighting Physics Wallah's position among top Indian edtech companies by revenue but expressing concern over its widening net loss from Rs 81 crore to Rs 216 crore due to increased depreciation and impairment losses. They found the valuation "fairly valued" at the upper price band. Angel One also assigned a 'Neutral' rating, advising investors to wait for clearer earnings visibility due to persistent losses, high scaling costs, and intense competition, noting that direct financial comparisons are difficult as it is a loss-making entity with no direct listed peers. InCred Equities, however, recommended subscribing to the IPO, anticipating profitability in the medium to long term driven by strong growth in online and offline verticals, despite acknowledging stretched valuations.

Impact This news has a direct impact on the Indian stock market, specifically the IPO segment and the EdTech sector. It reflects investor sentiment towards new listings and the financial health of edtech companies, which can influence investment decisions in similar companies. The muted subscription and declining GMP may lead to a subdued listing performance, potentially affecting investor confidence in upcoming IPOs. Rating: 6/10.

Difficult Terms Explained: * **IPO (Initial Public Offering)**: The process by which a private company offers its shares to the public for the first time, allowing it to raise capital from investors and become a publicly traded company. * **Subscription**: The process where investors indicate their willingness to buy shares offered in an IPO. The subscription level shows how many times the IPO has been oversubscribed or undersubscribed. * **Retail Investors**: Individual investors who buy securities for their own account, typically with smaller investment amounts. * **Non-Institutional Investors (NII)**: Investors who apply for shares above the retail investor limit but are not Qualified Institutional Buyers. This usually includes high-net-worth individuals and corporates. * **Qualified Institutional Buyers (QIBs)**: Large institutional investors such as mutual funds, foreign institutional investors, pension funds, and insurance companies, which are typically seen as sophisticated investors. * **Grey Market Premium (GMP)**: The unofficial premium at which an IPO's unlisted shares are traded before they are listed on the stock exchange. A positive GMP indicates expected listing gains, while a negative GMP suggests potential losses. * **Net Loss**: The total expenses of a company exceeding its total revenues during a specific period, resulting in a financial loss. * **Depreciation Expenses**: The accounting process of allocating the cost of a tangible asset over its useful life. * **Impairment Losses**: A charge taken when the carrying amount of an asset exceeds its recoverable amount, indicating a permanent decline in value. * **Valuation**: The process of determining the current worth of an asset or a company. * **EV/Sales Multiple**: A valuation metric that compares a company's enterprise value to its total revenue, used to assess how the market values the company's sales. * **CAGR (Compound Annual Growth Rate)**: The average annual growth rate of an investment over a specified period longer than one year. * **Brand Recall**: The extent to which consumers can remember a brand. * **Profitability**: The ability of a business to generate profit from its operations. * **Scaling Costs**: The expenses incurred by a company as it expands its operations and customer base. * **Moat (Economic Moat)**: A sustainable competitive advantage that allows a company to protect its long-term profits and market share from competitors.