PhysicsWallah files updated papers for Rs 3,820 crore IPO, Alakh Pandey, Prateek Maheshwari to pare stake

PhysicsWallah Files Rs 3,820 Crore IPO; Founders to Offload Stake.

Expert Analysis:

• IPO Structure: PhysicsWallah filed its updated draft red herring prospectus with Sebi to raise Rs 3,820 crore, including a fresh issue of Rs 3,100 crore and an offer for sale of Rs 360 crore each by cofounders Alakh Pandey and Prateek Maheshwari.

• Utilisation of Proceeds: Funds will be allocated towards new offline and hybrid centres (Rs 460 crore), lease payments (Rs 548 crore), subsidiaries (Rs 81 crore), and acquisitions with not more than 25% of the fresh issue proceeds directed to inorganic growth.

• Business Expansion: The company has grown through acquisitions like Utkarsh Classes and Xylem Learning. Unique online transacting users increased at a 56.8% CAGR between FY23 and FY25. Offline centres scaled at 166% CAGR while operating revenue grew at 97% CAGR over the same period.

• Financial Performance: For FY25, PhysicsWallah reported revenue of Rs 2,886 crore, up from Rs 1,940 crore in FY24. Losses reduced to Rs 243 crore from Rs 1,131 crore in FY24. Online channels contributed 48.6% of revenue.

• Shareholding and Market Position: Pandey and Maheshwari hold 80.7% pre-IPO stake, among the highest in VC-backed startups. Backed by WestBridge, GSV, and Lightspeed, PhysicsWallah competes with Aakash Institute, Allen Career Institute, and Unacademy in the test-prep market.

• Valuation and Sector Context: The firm raised $210 million in September 2024 at a $2.8 billion valuation from Hornbill Capital and Lightspeed. It will be the first Indian edtech to list publicly after the sector’s reset post-Byju’s collapse.