IPO closes on 13 Nov'25
PhysicsWallah Ltd
Minimum Investment
₹ 14,933 / 137 shares
Our Verdict:
Avoid
- PhysicsWallah Ltd has delivered impressive topline growth but continues to grapple with profitability, having reported net losses for three consecutive fiscal years.
- Although the company briefly turned EBITDA positive in FY25, margins slipped back into negative territory in Q1FY26 due to higher rental outlays, rising faculty costs and the rapid expansion of offline centres. While this expansion strengthens brand presence, the offline model carries heavy fixed costs and elongated payback periods.
- Despite strong brand recall and an affordability-driven proposition, PhysicsWallah remains in the early phase of its economic maturity, still transitioning from a high-growth platform to a sustainable, cash-generating enterprise.
- While the growth trajectory is promising, the lack of profitability is a key concern. Moreover, historically, listed education and edtech companies in India have struggled to generate sustained shareholder value.
- Given these factors, investors are advised to maintain a cautious stance and consider participation only once profitability sustains and earnings visibility improves over the coming quarters.
About the company
Founded in
6 Jun'20
Managing director
Alakh Pandey
- PhysicsWallah started as a YouTube channel dedicated to JEE and NEET preparation and has since transformed into a comprehensive hybrid education ecosystem. Today, it operates across 13 learning categories, covering school foundation programs, competitive exams, up-skilling, and professional courses.
- The company follows a multi-format delivery model: (i) Online (website, mobile app and YouTube channels); (ii) Offline (Vidyapeeth centres offering in-person classroom sessions); and (iii) Hybrid: (Pathshala centres, where students attend online classes at physical locations with on-site faculty support for doubt resolution). This integrated model enables PhysicsWallah to cater to a vast student base across metros and Tier-II/III cities while maintaining its hallmark of affordable, high-quality education.
STRENGTHS
- Market Leadership: PhysicsWallah ranks among India’s top five education companies by revenue and hosts the country’s largest online student community. Its flagship YouTube channel, “Physics Wallah – Alakh Pandey”, had around 13.7 million subscribers as of 15 July 2025, underscoring its strong digital reach and brand influence.
- Solid Revenue Growth: The company’s revenue surged from Rs 744 crore in FY23 to Rs 2,887 crore in FY25, marking an impressive two-year CAGR of 97%. Growth was primarily driven by the offline segment, which expanded from Rs 281 crore to Rs 1,352 crore during the same period.
- Robust User Growth: PhysicsWallah has effectively converted its large digital following into a growing base of paying learners. Between FY23 and FY25, its paid user base grew at a 59% CAGR to 4.46 million. The momentum continued in Q1FY26, with 2.43 million paid users compared to 1.87 million a year earlier.
- Rapid Offline Expansion: As of 30 June 2025, PhysicsWallah operated 303 offline centres across India, reflecting a 166% CAGR between FY23 and FY25. This swift expansion strengthens its hybrid model and enhances accessibility for students nationwide.
RISK FACTORS
- Sustained Losses: Despite strong revenue growth, PhysicsWallah continues to incur losses — Rs 84 crore in FY23, Rs 1,131 crore in FY24 and Rs 243 crore in FY25. The company also reported a loss in Q1FY 2026. Failure to generate adequate revenue, control operating costs or manage cash flows efficiently as it scales could prolong losses and strain its financial health.
- Limited Operating Leverage: While revenue grew at a 97% CAGR between FY23 and FY25, driven by offline expansion and new course launches, operating leverage remains constrained. After turning EBITDA positive briefly in FY25, margins reverted to negative in Q1FY26 due to increased rental expenses, higher faculty costs and accelerated centre expansion.
- Loss-Making Subsidiaries: Certain subsidiaries — including Xylem, Knowledge Planet and Utkarsh Classes — reported losses in FY24, FY25 and Q1FY26, alongside negative net worth positions. Continued underperformance may necessitate financial support from the parent entity, potentially affecting consolidated cash flows, profitability and overall financial stability.
- High Faculty Attrition: The faculty attrition rate stood at around 36% in FY25, posing operational challenges for a teacher-led business model. Sustained quality and continuity depend heavily on the leadership of founders Alakh Pandey and Prateek Boob, as well as key management personnel. The loss of any of these individuals could materially affect business operations and growth prospects.
- Legal Exposure: The company, along with certain directors and subsidiaries, is involved in ongoing legal proceedings amounting to approximately Rs 19 crore. Any adverse outcome could materially impact its financial condition, operations, or brand reputation.
- Intense Competition: The Indian education sector remains highly fragmented, with a mix of organised and unorganised players across segments. PhysicsWallah faces strong competition from established edtech firms and traditional coaching institutes, which may exert pressure on market share, pricing and profitability.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 3,480 crore
Fresh Issue
₹ 3,100 crore
OFS
₹ 380 crore
Price range
₹ 103 - 109
Lot size
137 shares
Issue Objective
The net proceeds from the fresh issue will be utilised for the following purposes:
- Capex for fit-outs of new offline and hybrid centers
- Lease payments for existing offline and hybrid centers
- Capex for fit-outs of new offline centers for Xylem;
- Lease payments for Xylem’s existing centers and hostels;
- Investment in Utkarsh Classes & Edutech Pvt Ltd for lease payments of its offline centers;
- Server and cloud infrastructure costs;
- Marketing initiatives;
- Acquisition of additional shareholding in Utkarsh Classes & Edutech Pvt Ltd; and
- Funding inorganic growth through acquisitions and general corporate purposes.
Dates
Bidding open
11 Nov'25
Bidding close
13 Nov'25
Allotment date
14 Nov'25
Refund date
17 Nov'25
Listing
18 Nov'25
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
This document has been issued by Liquide Solutions Private Limited for information purposes only. It does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek personal and independent advice regarding the appropriateness of investing in any of the funds, securities, other investment or investment strategies that may have been discussed or referred herein and should understand that the views regarding future prospects may or may not be realized. In no event shall Liquide Life Private Limited and / or its affiliates or any of their directors, trustees, officers and employees be liable for any direct, indirect, special, incidental or consequential damages arising out of the use of information / opinion herein.