PhysicsWallah Raises ₹1,563 Crore from Anchor Investors with 13x Oversubscription Ahead of IPO
Edtech unicorn PhysicsWallah has secured a strong vote of confidence from institutional investors, raising ₹1,562.85 crore from 57 anchor investors at the upper price band of ₹109 per share, ahead of its highly anticipated initial public offering. The anchor book attracted bids worth nearly ₹20,000 crore, representing an impressive oversubscription of approximately 13 times, signaling robust institutional interest in India's education technology sector.
Anchor Allocation Details
According to the company's filing with stock exchanges, 14,33,80,733 equity shares were allotted to anchor investors at ₹109 per share. The allocation demonstrated strong participation from both domestic and international institutional investors, reflecting widespread confidence in PhysicsWallah's business model and growth potential.
Strong Domestic Mutual Fund Participation
Domestic mutual funds showed particularly strong interest in the anchor round. Out of the total anchor portion, 7.95 crore shares (55.48%) were allocated to 14 domestic mutual funds across 35 schemes, collectively raising ₹867 crore.
Prominent domestic asset management companies that participated in the anchor investment include:
- ICICI Prudential Mutual Fund
- Kotak Mahindra Mutual Fund
- Nippon Life India Mutual Fund
- Aditya Birla Sun Life Mutual Fund
- DSP Mutual Fund
- Motilal Oswal Mutual Fund
- 360 ONE
- Tata Mutual Fund
- Bharti AXA Life Insurance
- Edelweiss Mutual Fund
- Canara Robeco Mutual Fund
This broad-based participation from India's leading mutual fund houses underscores the attractiveness of PhysicsWallah's investment proposition to domestic institutional capital.
Global Institutional Investor Interest
The anchor round also witnessed strong participation from renowned global investment firms, including:
- Capital Research and Management Company
- Goldman Sachs Asset Management (GSAM)
- Fidelity Investments
- Franklin Templeton
- PineBridge Investments
- Eastspring Investments
- White Oak Capital
The presence of these global institutional investors validates PhysicsWallah's potential in the international investment community and brings experienced long-term capital to the company's shareholder base.
Secondary Transaction at Premium Valuation
Adding to the positive momentum, global investment firm Think Investments infused ₹136 crore into PhysicsWallah last week through a secondary share transaction. Notably, this deal was executed at ₹127 per share, representing a substantial 17% premium over the IPO's upper price band of ₹109.
This premium transaction suggests strong investor appetite for PhysicsWallah shares even at valuations above the IPO price range, potentially indicating positive sentiment for the stock's post-listing performance.
IPO Structure and Timeline
PhysicsWallah is set to launch its ₹3,480 crore IPO on November 11, 2025. The public issue comprises two components:
- Fresh Issue: ₹3,100 crore to be raised by the company
- Offer for Sale (OFS): ₹380 crore by co-founders Alakh Pandey and Prateek Boob
The IPO is priced in the range of ₹103–₹109 per share, valuing the company at over ₹31,500 crore at the upper price band. This valuation positions PhysicsWallah among India's most valuable edtech companies and reflects the market's recognition of the company's growth trajectory and market leadership.
Financial Performance Overview
According to the Red Herring Prospectus (RHP), PhysicsWallah's financial performance for FY25 showed substantial scale with growing revenues:
FY25 Financial Performance
- Operating Revenue: ₹2,887 crore
- Net Loss: ₹243 crore
Q1 FY26 Performance
For the first quarter of the ongoing fiscal year (Q1 FY26), the company reported:
- Revenue: ₹847 crore
- Loss: ₹127 crore
While the company continues to report losses, the substantial revenue generation demonstrates PhysicsWallah's ability to scale its business and capture market share in India's competitive edtech landscape. The ongoing losses are typical for high-growth technology companies investing heavily in expansion, content development, and customer acquisition.
About PhysicsWallah
PhysicsWallah was founded by Alakh Pandey and Prateek Boob with a mission to make quality education accessible and affordable to students across India. The platform initially gained popularity through free YouTube educational content before transitioning to a comprehensive edtech platform offering both free and paid courses.
The company has built a strong brand in the competitive exam preparation segment, particularly focusing on:
- JEE (Joint Entrance Examination) preparation for engineering aspirants
- NEET (National Eligibility cum Entrance Test) preparation for medical students
- Board examination preparation for secondary education
- Foundation courses for younger students
Competitive Landscape and Market Position
PhysicsWallah operates in India's rapidly evolving edtech sector, which has experienced significant growth driven by increasing internet penetration, smartphone adoption, and changing learning preferences. The company differentiates itself through:
- Affordable pricing: Significantly lower course fees compared to traditional coaching institutes
- Quality content: Comprehensive study materials and video lectures
- Brand trust: Strong reputation built through founder Alakh Pandey's YouTube presence
- Vernacular approach: Content delivery in regional languages alongside English
- Hybrid model: Combining online and offline learning centers
Use of IPO Proceeds
The ₹3,100 crore fresh issue proceeds will be utilized by PhysicsWallah for various strategic initiatives, typically including:
- Technology infrastructure and platform development
- Content creation and curriculum expansion
- Marketing and brand building activities
- Expansion of offline learning centers
- Potential acquisitions and strategic investments
- Working capital requirements
Investment Considerations
Growth Drivers
- Market opportunity: Large and growing addressable market in India's education sector
- Digital adoption: Accelerating shift toward online learning platforms
- Brand strength: Strong recognition and trust among target student demographics
- Affordable pricing: Competitive advantage in price-sensitive Indian market
- Omnichannel approach: Combination of online and offline presence
Challenges and Risks
- Continued losses: Company not yet profitable, requiring sustained investment
- Intense competition: Crowded edtech market with multiple well-funded players
- Regulatory uncertainty: Evolving regulations affecting education technology sector
- Customer retention: Challenge of maintaining student engagement and course completion rates
- Scale vs. profitability: Balancing growth investments with path to profitability
Market Sentiment and Expectations
The overwhelming response to the anchor book, with 13x oversubscription, indicates strong institutional conviction in PhysicsWallah's business model and growth prospects. The participation of leading domestic mutual funds suggests confidence that retail investors may follow their lead during the public subscription period.
The premium achieved in the secondary transaction by Think Investments further reinforces positive market sentiment, potentially setting the stage for strong listing performance.
What This Means for Retail Investors
Retail investors considering PhysicsWallah's IPO should evaluate several factors:
- Strong anchor response: Institutional confidence may indicate positive fundamentals
- Premium secondary transaction: Suggests investor willingness to pay above IPO price
- Growth story: Significant revenue growth demonstrates market traction
- Loss-making status: Continued losses require assessment of path to profitability
- Valuation: Over ₹31,500 crore valuation should be evaluated against peers and growth prospects
- Sector dynamics: Understanding edtech sector trends and competitive intensity
Conclusion
PhysicsWallah's successful anchor book allocation, raising ₹1,563 crore with 13x oversubscription, positions the company favorably ahead of its November 11 IPO opening. The strong participation from both domestic and international institutional investors, combined with a recent secondary transaction at premium valuation, suggests robust market interest in India's edtech sector and PhysicsWallah's specific growth story.
As the IPO opens for public subscription, investors will be watching closely to see if retail demand matches the enthusiasm demonstrated by institutional investors in the anchor round.
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