Physicswallah Files Updated DRHP to Raise Rs 3,820 Crore via IPO – TechStory

Noida-based online education platform Physicswallah, backed by WestBridge Capital, Hornbill, and GSV Ventures, has filed an updated Draft Red Herring Prospectus (DRHP) with SEBI as of September 6, aiming to raise Rs 3,820 crore through its initial public offering (IPO). The offering will comprise a fresh issue of shares worth Rs 3,100 crore and an offer-for-sale (OFS) component of Rs 720 crore by promoters Alakh Pandey and Prateek Boob. This follows SEBI’s approval of the company’s pre-filing application in July, a confidential step that allows regulatory review before making the offer document public. The proposed IPO intends to support the company’s rapid offline and hybrid expansion while also enabling secondary sales by its leading promoters.

Fund Utilization: Infrastructure, Subsidiaries, and Marketing

Physicswallah announced detailed plans for utilizing the IPO proceeds as per the updated DRHP. To boost its physical presence in the test preparation industry, an important amount of Rs 460.6 crore has been set aside for the fit-out of new offline and hybrid centers. The company will also allocate Rs 548.3 crore for lease payments at existing offline facilities, while Rs 47.2 crore is planned for investment in the subsidiary Xylem Learning. Additional investments include Rs 33.7 crore for Utkarsh Classes & Edutech’s lease payments and Rs 26.5 crore to increase its equity stake in the same subsidiary. In addition to infrastructure, the business plans to invest Rs 710 crore in marketing campaigns and Rs 200.1 crore on server and cloud infrastructure. The remaining funds will be used for general business reasons and possible future acquisitions, showing Physicswallah’s aspirations in both technological and market expansion.

Shareholding Structure and Financials:

Physicswallah’s promoters, Alakh Pandey and Prateek Boob, currently hold an equal 40.35% stake each in the company, representing a joint 82.3% promoter shareholding. Public shareholders own the remaining 17.7%. The next largest stakeholder is WestBridge AIF I, managed by WestBridge Capital, with 6.41% of shares. Other notable investors include Hornbill Capital Partner (4.42%), GSV Ventures Fund III (2.85%), Lightspeed Opportunity Fund (1.79%), and Setu AIF Trust (1.39%). The edtech company reported a sharp reduction in net losses, down to Rs 243.2 crore in FY25 compared with Rs 1,131.1 crore for the previous year, while revenues increased by 48.7% to Rs 2,886.6 crore, signifying strong growth and improving profitability. This financial performance highlights the viability of its IPO ambitions as it seeks to expand and strengthen its market presence.

Physicswallah’s Market Leadership in the Edtech Sector:

Physicswallah has become one of the top edtech platforms in India by utilizing a unique blend of offline and online business models, strategic acquisitions, and an emphasis on affordability to take an important portion of the quickly changing education technology market. With offline centers growing at a 166% pace and sales rising at a CAGR of about 97% since FY23, the company’s growth trajectory as of FY25 has been extraordinary. With 198 locations spread over 109 cities and more than 44.6 lakh paying users, Physicswallah has surpassed several of its rivals in terms of user growth, showing its extensive reach in Tier 2 and Tier 3 cities in India. Its leadership in test preparation services has been strengthened by strategic acquisitions such as Xylem Learning and Utkarsh Classes. As Physicswallah approaches its IPO, it is poised to become the first Indian edtech startup listing post-Byju’s reset, a move likely to set benchmarks for profitability, scalability, and investor confidence in the Indian edtech landscape.

Strategic Expansion and Market Outlook:

Physicswallah is renowned for its test preparation courses for competitive exams such as JEE, NEET, GATE, and UPSC, as well as skill development programs. The company’s updated DRHP and significant fund allocation toward expansion and technology signal its intent to scale up rapidly, blending offline, hybrid, and digital models to reach a broader student base. Leading financial institutions Kotak Mahindra Capital, JP Morgan India, Goldman Sachs (India) Securities, and Axis Capital have been mandated to manage the IPO process. As Physicswallah moves forward, its combination of strong investor support, improving financials, and aggressive growth plans make it a key player to watch in India’s burgeoning edtech sector.