PhysicsWallah’s ₹3,480-Crore IPO Debuts Today: Analysts Maintain a ‘Neutral’ Outlook

India’s edtech platform PhysicsWallah has opened its ₹3,480-crore IPO today, offering investors an opportunity to participate in one of the most anticipated listings in the sector. Ahead of the IPO, the shares were trading at a grey market premium (GMP) of ₹3 per share, indicating modest investor interest. The IPO comprises both a fresh issue and an Offer for Sale (OFS), with notable foreign investors backing the company.

PhysicsWallah IPO Overview

The PhysicsWallah IPO consists of:

• Fresh issue: ₹3,100 crore

• Offer For Sale (OFS): ₹380 crore

• Allocation: 75% for Qualified Institutional Buyers (QIBs) and 10% for retail investors

• Promoter holding post-IPO: 72.3% (down from 81.6%)

The IPO price band is set between ₹103 and ₹109 per share, with retail investors required to bid for a minimum lot of 137 shares, costing around ₹14,933. Eligible employees are entitled to a ₹10 discount per share.

Book Running Lead Managers include Kotak Capital, JPMorgan India, Goldman Sachs (India), and Axis Capital. Key anchor investors supporting the IPO include Capital Group, Fidelity, Goldman Sachs, Abu Dhabi Investment Council, and PineBridge.

Grey Market Performance

PhysicsWallah shares were trading at a grey market premium of ₹3 per share prior to the IPO launch. Market experts note that GMPs are indicative and may fluctuate rapidly, providing only a preliminary sense of demand among investors.

Analyst Opinions on PhysicsWallah IPO

SBI Securities – Neutral

SBI Securities has maintained a ‘Neutral’ rating, citing the need to observe post-listing performance. Over the past three years, the company has achieved:

• Sales CAGR: 96.9%

• EBITDA CAGR: 88.8%

However, net losses widened from ₹81 crore in FY23 to ₹216 crore in FY25, driven by higher depreciation and financial asset impairments.

InCred Equities – Subscribe

InCred Equities recommends a ‘Subscribe’ rating, noting strong growth across online and offline education verticals. The IPO is valued at an EV/sales multiple of 10.7x at the upper price band. While valuation appears stretched, the company’s competitive moat and expansion strategy are seen as positive for long-term growth.

Angel One – Neutral

Angel One assigns a ‘Neutral’ rating, highlighting that PhysicsWallah remains loss-making, making P/E comparisons with peers irrelevant. The firm notes strong revenue growth and high brand recognition but cautions that profitability is constrained by rising competition and high scaling costs.

Key Risk Factors

Investors should be aware of potential risks:

1. Faculty and Student Retention: Dependence on high-quality faculty and student engagement is critical. Breaches of non-compete clauses or poor student outcomes could affect performance.

2. Founder Dependence: Heavy reliance on founders Alakh Pandey and Prateek Boob presents key personnel risk. Any exit could impact strategy, brand, and operations.

3. Industry Dynamics: Frequent changes in exam patterns and curricula require constant updates to remain competitive.

Pricing and Investment Details

• Price Band: ₹103–₹109 per share

• Minimum Investment: ₹14,933 for one lot of 137 shares

• Retail Allocation: 10%

• Post-Issue Market Cap: Estimated at ₹31,169 crore at the upper band

About PhysicsWallah

Founded in 2016 by Alakh Pandey, a physics teacher and college dropout, PhysicsWallah began as a YouTube educational channel offering free learning content. The platform gained popularity during the COVID-19 pandemic and has since expanded to:

• 303 offline centers across 152 cities in India and the Middle East

• A blend of online courses and offline education for competitive exams

The company’s growth story reflects its transition from digital content creation to a full-fledged edtech enterprise serving millions of students.

Conclusion

The PhysicsWallah IPO marks a major milestone for India’s edtech sector, combining strong anchor investor backing, a large retail subscription opportunity, and significant expansion potential. While analysts remain cautious, citing profitability challenges, the IPO provides investors access to a fast-growing education technology company with both online and offline reach.