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PhysicsWallah

• PhysicsWallah is coming out with a 100% book building; initial public offering (IPO) of 33,79,37,152 shares of 1 each in a price band Rs 103-109 per equity share. 
• Not more than 75% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 10% for the retail investors.
• The issue will open for subscription on November 11, 2025 and will close on November 13, 2025.
• The shares will be listed on BSE as well as NSE.
• The face value of the share is Rs 1 and is priced 103.00 times of its face value on the lower side and 109.00 times on the higher side.
• Book running lead managers to the issue are Kotak Mahindra Capital Company, J.P. Morgan India, Goldman Sachs (India) Securities and Axis Capital.
• Compliance Officer for the issue is Ajinkya Jain.

Profile of the company

PhysicsWallah offers test preparation courses for competitive examinations, and other courses such as for upskilling. its channels of delivery include (i) online, which includes its social media channels, website and apps; (ii) tech-enabled offline centers (where its faculty conducts live classes in a physical center); or (iii) hybrid centers (its two-teacher model where a student attends a live online classes at a physical center and can benefit from another faculty that is present at the center to resolve questions and participate in revision classes). Among the top 5 education companies in terms of revenue in India, it is the largest in India in terms of student community, with its main YouTube channel, 'Physics Wallah-Alakh Pandey' having 13.7 million subscribers as of July 15, 2025. Its YouTube community had 98.80 million subscribers as at June 30, 2025 and grew at a CAGR of 41.80% between Fiscals 2023 and 2025. It also has a significant offline presence among education companies in India in terms of offline revenue. The company is also among the top-five education companies in terms of revenue in India and are one of the fastest-growing companies in terms of revenue growth during Fiscals 2023 to 2025.

The company has sought to cultivate its student community by offering quality education. It provides content using engaging and tech-enabled pedagogy (which means teaching methodologies). Further, a large portion of its materials and courses are available in an open access or free format on its 207 YouTube channels (as at June 30, 2025), with an option for students to sign up for free or paid courses on its website or its mobile applications (apps). Among the top 5 test preparation companies in terms of revenue as of Fiscal 2024, Some of its paid test preparation courses focusing on Joint Entrance Examinations (JEE, an entrance exam of engineering colleges in India), National Eligibility cum Entrance Test (NEET, an entrance test for medical colleges in India) and civil service examinations such as Union Public Service Commission (UPSC) examinations, have the most affordable prices in India as at July 2025.

The company started its operations by offering courses online and have expanded to multiple channels of delivery - online, offline and hybrid. This gives students the flexibility to choose their preferred mode of study. For the three months ended June 30, 2025 and Fiscal 2025, it had 2.10 million and 4.13 million Unique Transacting Users (Online Channel), and 0.33 million and 0.33 million student enrolments in its offline centers, respectively. It operated 303 Total Offline Centers as at June 30, 2025, and its Total Offline Centres grew at a CAGR of 165.92% between Fiscals 2023 to 2025. It aims to leverage its proprietary technology stack to provide content at scale, integrate new offerings successfully, and offer tech-backed tools to students and teachers for planning coursework, solving questions, grading tests, leading to efficient pedagogy.

Proceed is being used for:

• Capital expenditure for fit-outs of new offline and hybrid centers of the company
• Expenditure towards lease payments of existing identified offline and hybrid centers operated by the company
• Investment in its Subsidiary, Xylem Learning Private Limited for expenditure toward i) capital expenditure for fit-outs of new offline centers of Xylem (New Xylem Centers) and ii) lease payments for Xylem’s existing identified offline centers and hostel
• Investment in its subsidiary, Utkarsh Classes & Edutech Private Limited for expenditure towards lease payments for Utkarsh Classes’ existing identified offline centers
• Expenditure towards server and cloud related infrastructure costs
• Expenditure towards marketing initiatives 
• Acquisition of additional shareholding in its Subsidiary, Utkarsh Classes & Edutech Private Limited
• Funding inorganic growth through unidentified acquisitions and general corporate purposes

Industry Overview

India’s education market is poised for significant growth, driven by a young population, growing middle-income households that prioritize education as essential spending, and the rapid expansion of digital infrastructure. With a projected market size of Rs 24-26 trillion ($300-310 billion) by Fiscal 2030, the sector remains one of the fastest growing segments of the economy. Tier 2 and beyond cities, comprising 43% of the market in Fiscal 2025, with their share projected to increase to 46% by Fiscal 2030 are the key drivers of this growth. India has one of the world’s largest education systems with ~1.5 million schools as of Fiscal 2024 and 45,000 colleges, and 1,100 universities as of Fiscal 2022. Government initiatives such as NEP 2020, the Samagra Shiksha Scheme, PMKVY, NEAT, RUSA, and Skill India, supported by an education budget of Rs 1,240 billion in Fiscal 2025 (2.6% of the total budget), are encouraging hybrid education models, inclusivity, and publicprivate partnerships. 

The market is shaped by five key segments - Pre-K, K-12, higher education, test preparation, and upskilling. Among these, K-12 and higher education dominate in scale, while test preparation and upskilling are witnessing rapid growth. Intense competition for limited seats drives demand for test preparation, with hybrid models enhancing affordability, access, and personalized learning. Upskilling demand is propelled by service sector growth, talent shortages, and rapid industrial changes, with affordability and self-paced flexibility widening market reach. Online penetration in education remains low but is expanding, with penetration increased from 2% in Fiscal 2022 to 4% in Fiscal 2025, and projected to reach 7% by Fiscal 2030, driven by increasing internet penetration, affordable data plans, and the adoption of hybrid models. 

Online education is breaking geographical barriers, enabling students in Tier 2 and beyond cities to access high quality resources and experienced educators. Personalized learning solutions powered by AI and adaptive technologies ensure tailored instruction, enhancing learning outcomes. Evolution of hybrid mode of education is also creating great impact on the education landscape by democratizing access, increasing flexibility of choice and customization for students, addressing teacher shortage by allowing remote access to teachers seamlessly. As India’s education ecosystem evolves, it not only serves as a catalyst for socio-economic mobility but also positions the country as a global hub for skilled talent. Success in this space requires scalable technology, omnichannel strategies, and models that integrate affordability, personalization, and accessibility. India’s education sector’s growth offers significant investment opportunities, with potential for both domestic and international expansion. Stakeholders who leverage scalable technology, omni-channel approaches, and affordability-focused models will be well-positioned to capitalize on this dynamic and evolving market. 

Pros and strengths

Presence across a large number of education categories in India: As at June 30, 2025, the company offered courses across 13 Education Categories which increased from six Education Categories as at March 31, 2023. Through its wide course offerings, it intends to be present across a student’s learning journey from early education to competitive examinations for university admissions, public administration jobs and professional qualifications, and also assist them with professional skills development. It offers a variety of courses for engineering and medical entrance examinations for undergraduate admissions in India (JEE, NEET) through its online, offline and hybrid channels. Students can start preparing for these competitive examinations for undergraduate studies in India while they are in school (classes six to 10) through its “Foundation” courses. The company offers its courses through multiple channels - (i) online; (ii) offline centers; or (iii) hybrid centers. Among the top 5 education companies in terms of revenue in India, it operates India’s largest online student community, with its main YouTube channel, 'Physics Wallah-Alakh Pandey' having 13.7 million subscribers as of July 15, 2025.

Proprietary technology-stack enhances students’ learning experience: Supported by a technology and product team, which consisted of 548 employees as at June 30, 2025, the company has built a flexible and scalable learning management system (LMS) technology stack, while ensuring enhancement of student experience at scale and maintaining the quality of pedagogy. By enabling system stability, its technology ensures that it delivers its offerings across multiple channels while handling large student Batches. It leverages AI, big data and machine learning to generate data insights which allow it to innovate new offerings and continuously improve its existing offerings. It also offers other tools such as “AI Sahayak” which is an AI backed goal-setting and progress-tracking tool, serving as a personalized smart companion for students in course management and revision. For teachers, the company has launched “TeacherX” for teachers to initiate and manage live classes without external tech support, and “PW Drona” which provides teachers an overview of student performance, monitoring, syllabus & schedule tracking.

Specialized faculty members across categories: As at June 30, 2025, the company had 6,267 Total Faculty Members (including employees and consultants) which primarily includes teachers, question/doubt resolution faculty and content development team. Its pool of faculty members ensure that it has specialists across multiple disciplines and functions related to academics. It has a defined structure with faculty members assigned to different functions with demarcated responsibilities. For example, the company has separate faculty for creating study material, for in-class teaching, for solving questions and for preparing exam papers. This structure helps it to respond to student needs and implement checks and balances.

It had 4.46 million Total Number of Paid Users in Fiscal 2025: For Fiscal 2025, the company had 4.46 million Total Number of Paid Users which grew at a CAGR of 59.19% between Fiscals 2023 and 2025 and in the three months ended June 30, 2025 it had 2.43 million Paid Users which increased from 1.87 million Paid Users in three months ended June 30, 2024. The company’s founders started “Physics Wallah” with an aim to increase the accessibility of education at affordable prices by leveraging technology. It has cultivated its student community by offering quality education and content, using engaging and tech-enabled pedagogy. It has a strong and growing community which is supported by its ability to convert an engaged digital community into paying users. Among the top 5 education companies in terms of revenue in India, it operates India’s largest online student community, with its main YouTube channel, “Physics Wallah-Alakh Pandey' having 13.7 million subscribers as of July 15, 2025.

Risks and concerns

Dependence on key education categories for user enrolments: 26.64%, 15.63%, 12.33% and 17.61% of its Number of Unique Transacting Users (Online Channel) are enrolled for courses across NEET, JEE, Other government examinations and Foundation Education Categories for the three months ended June 30, 2025. The company’s failure to offer these Education Categories or increase enrolments across its other Education Categories could have an adverse impact on its operations and cash flows.

Sustained losses may adversely impact financial stability: The company has incurred restated loss for the period/year of Rs 1,270.09 million, Rs 718.12 million, Rs 2,432.58 million, Rs 11,311.30 million and Rs 840.75 million for the three months ended June 30, 2025 and June 30, 2024, and Fiscals 2025, 2024 and 2023, respectively, and have had negative net worth as at March 31, 2024 and negative EBITDA in Fiscal 2024 and the three months ended June 30, 2025. If it is unable to generate adequate revenue growth and manage its expenses and cash flows as it grows, it may continue to incur losses in the future, which may negatively affect its financial condition.

Geographical constrain: The company derived a significant portion of its offline revenue from the offline centers located in the Indian cities of Delhi NCR, Patna in Bihar, Kota in Rajasthan, Calicut in Kerala, Lucknow in Uttar Pradesh and Kolkata in West Bengal. Any failure to expand its network of offline centers could expose it to concentration risks which could impact its business and operations.

Seasonal fluctuations in enrolments and revenue: The company’s operations are influenced by seasonality, with student enrolments closely linked to the timing of school board examinations and competitive examinations for university admissions, as well as the release of examination results. Enrolments typically increase from March to August, coinciding with the start of the academic year for test preparation courses for examinations such as JEE, NEET, UPSC examinations, and GATE. As a result, its collections are highest during this period of the fiscal year, and the majority of its revenue is recognized during the second and third quarters of the fiscal year.

Outlook

Physicswallah is an edtech company offering test preparation courses for various competitive examinations like JEE, NEET, UPSC, etc. and upskilling courses like Data science and analytics, banking and finance, software development, etc. The company has 4.46 million Total Number of Paid Users in Fiscal 2025, grew at a CAGR of 59.19% from fiscal 2023 to 2025. It has presence across a large number of education categories in India with courses offered through multiple channel. On the concern side, the company has a limited operating history of less than six years, particularly in its offline and hybrid channels of delivery, and its business has experienced rapid growth in recent years. The company’s failure to continue increasing its offline and online services could adversely impact its business, operations, cash flows and financial condition. Moreover, the company has less control on the operations of some of its offline centers which are operated under franchisee arrangements, which may have a material negative effect on its reputation, business, cash flows and financial condition.

The issue has been offering 33,79,37,152 shares in a price band of Rs 103-109 per equity share. The aggregate size of the offer is around Rs 3480.75 crore to Rs 3683.51 crore based on lower and upper price band respectively. Minimum application is to be made for 137 shares and in multiples thereon, thereafter. On performance front, the company’s total income increased by 50.80% to Rs 30,390.89 million in Fiscal 2025 from Rs 20,153.48 million in Fiscal 2024, primarily due to an increase in its revenue from operations, which rose by 48.74% to Rs 28,866.43 million in Fiscal 2025 from Rs 19,407.10 million in Fiscal 2024. Moreover, the company’s restated loss for Fiscal 2025 was Rs 2,432.58 million in Fiscal 2025, as compared to net loss of Rs 11,311.30 million in Fiscal 2024.

The company intends to continue investing in developing tech-backed tools and services to support a student’s education journey for superior outcomes which attracts them to its ecosystem. For example, the company is developing “AI NCERT” - a tool to convert National Council of Educational Research and Training (“NCERT”) textbooks, which are books prescribed by the Central Board of Secondary Education for school students in India and also used for JEE and NEET studies, into an interactive format. It is in the process of developing an AI powered personalized study path to support students plan their studies, analyse their results and map their progress. Such initiatives will help the company to grow its student community further and foster a sense of trust in its brand. It intends to further invest in expanding the capacity of its cloud architecture to handle more students, teachers and content.