US Investment Firm Think Investments Acquires Stake in IPO-Bound PhysicsWallah

US investment firm Think Investments has acquired a significant stake in the popular edtech company PhysicsWallah (PW) through a secondary transaction. Think Investments purchased 1.07 crore equity shares, representing 0.37% of the company, from 14 of PhysicsWallah's employees. The transaction, valued at INR 136.17 crore, saw Think Investments acquire the shares at INR 127 per share, a price higher than PhysicsWallah's announced IPO price band of INR 103-109. PhysicsWallah, founded by Shashin Shah, recently filed its Red Herring Prospectus (RHP) for an Initial Public Offering (IPO) aiming to raise INR 3,480 crore. The IPO includes a fresh issue of INR 3,100 crore and an offer for sale (OFS) of up to INR 380 crore. The public issue is set to open on November 11 and close on November 13, with shares expected to list on November 18. At the upper end of the price band, PhysicsWallah is valued at INR 31,169 crore. The funds raised will primarily be used to expand the company's offline presence, with a significant portion allocated for centre fit-outs and lease payments. PhysicsWallah operated 303 centres by the end of Q1 FY26, a substantial increase from 182 centres a year prior. Financially, the company reported a net loss of INR 125.5 crore in Q1 FY26, an increase from INR 70.6 crore in the previous year, while operating revenue grew by 33% to INR 847 crore.

Impact This acquisition by Think Investments, a firm known for backing tech-driven early-stage businesses, signals strong investor confidence in PhysicsWallah's future prospects and its upcoming IPO. Acquiring shares at a premium to the IPO band may positively influence investor sentiment and could potentially lead to a successful IPO and higher market valuation for PhysicsWallah. It also highlights continued foreign interest in India's burgeoning edtech sector. Rating: 7/10

Difficult Terms: Secondary Transaction: A sale of existing shares from current shareholders to a new investor, rather than the company issuing new shares. IPO-bound: A company that is planning to list its shares on a stock exchange but has not yet completed the process. Equity Shares: Units of ownership in a corporation. Aggregate Consideration: The total amount of money paid in a transaction. RHP (Red Herring Prospectus): A preliminary document filed with regulators before an IPO, containing detailed information about the company and the offering. Fresh Issue: The issuance of new shares by a company to raise capital. Offer for Sale (OFS): When existing shareholders sell a portion of their shares during an IPO. Anchor Bidding: A process where institutional investors subscribe to shares before the IPO opens to the public, aiming to provide price stability. Valuation: The estimated financial worth of a company. Fit-outs: The process of completing the interior of a building or space to make it suitable for occupancy. Earmarked: Set aside or designated for a specific purpose. Q1 FY26: The first quarter of the financial year 2025-2026 (April-June 2025). Operating Revenue: Income generated from a company's primary business activities.