Startup Originals Team
PhysicsWallah, the Noida-based edtech unicorn founded by Alakh Pandey, has filed an updated Draft Red Herring Prospectus (DRHP) with SEBI to launch a massive ₹3,820 crore initial public offering (IPO). This could make PhysicsWallah India’s first edtech unicorn to debut on the country’s stock exchanges, setting a precedent in the booming online education sector.
IPO Structure and Objectives:
The IPO will consist of a fresh issue of shares worth ₹3,100 crore and an offer for sale (OFS) totaling ₹720 crore by co-founders Alakh Pandey and Prateek Boob (Maheshwari), each selling shares worth up to ₹360 crore. Promoters currently hold a combined 82.3% stake in the company, with Alakh and Prateek each owning 40.35%. Major institutional investors include WestBridge Capital, Hornbill, GSV Ventures, Lightspeed, and Setu AIF Trust.
The funds raised will be channeled into:
- Expanding and outfitting new offline and hybrid learning centers (₹460.6 crore)
- Lease payments for existing locations (₹548.3 crore)
- Investments in subsidiaries Xylem Learning (₹47.2 crore) and Utkarsh Classes & Edutech (₹33.7 crore)
- Acquiring additional stake in Utkarsh (₹26.5 crore)
- Server and cloud infrastructure (₹200.1 crore)
- Marketing initiatives (₹710 crore)
- Corporate and acquisition activities.
Business Performance and Growth:
Founded in 2016, PhysicsWallah has built a dominant presence in test preparation for competitive exams such as JEE, NEET, GATE, and UPSC. The company now also serves upskilling and hybrid education markets. As of FY25, PhysicsWallah reports 44.6 lakh (4.46 million) paid users, representing a 59% CAGR between FY23 and FY25.
Financial Highlights:
- Revenue jumped 49% in FY25 to ₹2,886.6 crore, up from ₹1,940.7 crore in FY24
- Net loss narrowed sharply to ₹243.2 crore in FY25 from ₹1,131.1 crore in FY24, aided by the absence of large fair value charges
- The company turned EBITDA-positive in FY25 with an EBITDA margin of 6.7%
- Offline centers, now totaling 198 across 109 cities, generated ₹1,351.9 crore (nearly matching online revenue of ₹1,404 crore)
- Average revenue per offline student reached ₹40,405, though overall ARPU declined due to a shift to more affordable segments (civil services, defence, accountancy).
Shareholding and Investor Details:
Besides the founders, major shareholders include WestBridge AIF I (6.41%), Hornbill Capital (4.42%), GSV Ventures Fund III (2.85%), Lightspeed Opportunity Fund (1.79%), and Setu AIF Trust (1.39%). The company’s last fundraising round, completed in September 2024, saw $210 million raised at a $2.8 billion valuation, while the upcoming IPO targets a near-doubling of that valuation to approximately $5 billion.
Management and Advisors:
The IPO is being managed by prominent players such as Kotak Mahindra Capital, JP Morgan India, Goldman Sachs (India) Securities, and Axis Capital. MUFG Intime India is the registrar. Both Alakh Pandey and Prateek Boob will remain actively involved, with compensation packages reflecting their responsibilities and market standing.
