Physics Wallah IPO Funds: Rs 285 Cr Used, Rs 2,814 Cr Undeployed Amid Losses

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AuthorRiya Kapoor|Published at:
Physics Wallah IPO Funds: Rs 285 Cr Used, Rs 2,814 Cr Undeployed Amid Losses
Overview

Physics Wallah Limited utilized Rs 285.68 crore of its Rs 3,100 crore IPO proceeds in Q3FY26. A significant Rs 2,814.32 crore remains unutilized, primarily held in fixed deposits. This comes as the company reported substantial losses: Rs 243 crore in FY25 and Rs 57 crore in H1FY26. Key utilizations included fit-outs for new centers, lease payments, and an increased stake in Utkarsh Classes & Edutech. However, Rs 243.33 crore was allocated to 'unidentified acquisitions and general corporate purposes,' raising transparency questions.

📉 The Financial Deep Dive

Physics Wallah Limited has provided an update on its Initial Public Offering (IPO) proceeds utilization for the quarter ended December 31, 2025 (Q3FY26), as confirmed by CARE Ratings Limited. The company, which raised a substantial Rs 3,100 crore through its IPO, utilized Rs 285.68 crore during the quarter. Encouragingly, CARE Ratings has confirmed that there has been no deviation from the objectives stated in the offer document.

The Numbers:

  • Total IPO Proceeds: ₹3,100 crore

  • Q3FY26 Utilization: ₹285.68 crore

  • Unutilized Proceeds (as of Dec 31, 2025): ₹2,814.32 crore

  • FY25 Loss After Tax: ₹243 crore

  • H1FY26 Loss After Tax: ₹57 crore

Key Utilizations in Q3FY26:
  • Capital expenditure for fit-outs of new centers: ₹2.42 crore

  • Lease payments for centers: ₹13.47 crore

  • Acquiring additional shareholding in subsidiary Utkarsh Classes & Edutech Private Limited: ₹26.47 crore (increasing stake to 75.50%)

A significant portion of the quarter's spending, amounting to ₹243.33 crore, was classified under the head 'Funding inorganic growth through unidentified acquisitions and general corporate purposes'. This broad category encompassed employee benefit expenses and professional fees (₹240.82 crore) and Goods and Services Tax (₹2.50 crore).

The Quality & Red Flags:
While the deployment of funds aligns with the offer document, the company's reported financial performance presents a notable concern. Physics Wallah incurred losses after tax of ₹243 crore in FY25 and ₹57 crore in H1FY26. This comes at a time when a substantial Rs 2,814.32 crore of IPO proceeds remains unutilized. These idle funds have been primarily parked in fixed deposits across various banks, earning interest rates between 5.25% and 6.80%. The allocation of a large sum to 'unidentified acquisitions' is a point that warrants further investor scrutiny, lacking specific detail on the planned inorganic growth drivers.

The Forward View:
All stated objectives are noted as ongoing with no reported delays. Investors will be closely watching the company's ability to translate its significant capital base and expansion plans into profitability, especially given the recent loss-making periods and the large proportion of unutilized IPO funds. The pace of inorganic growth, if any, and the clarity around the 'unidentified acquisitions' will be critical factors to monitor.

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