PhysicsWallah likely to launch ₹3,820 crore IPO in coming weeks

Top edtech unicorn PhysicsWallah is said to be nearing an initial public offering (IPO) that could raise around ₹3,820 crore, according to a Bloomberg report.

The WestBridge Capital LLP- and Hornbill Capital Partners-backed online education platform has met potential investors, and the deal could be launched in the coming weeks, the report said.

The proposed offering includes a fresh issue of equity shares worth ₹3,100 crore and an offer for sale (OFS) by existing shareholders amounting to ₹720 crore, by founders Alakh Pandey and Prateek Boob, according to the company's draft prospectus.

Deliberations are ongoing, and both the valuation and timing could still change, the report added.

The two founders currently own 40.35% each in the company, while WestBridge Capital and Hornbill Capital hold 6.41% and 4.42%, respectively, the prospectus shows.

SEBI had approved the pre-filing of draft papers in July this year. This confidential pre-filing route allows companies to seek regulatory review before making their offer documents public.

Proceeds from the fresh issue will be used for various purposes: ₹710 crore for marketing initiatives, ₹548 crore towards lease payments for existing offline and hybrid centres, ₹460 crore for capital expenditure on new centres, and ₹471 crore for investment in subsidiary Xylem Learning Pvt Ltd.

PhysicsWallah offers test preparation and upskilling courses. The platform had 44.6 lakh paid users in FY25, growing at a CAGR of 59% between FY23 and FY25, according to the draft papers.

In September 2024, the company raised $210 million at a valuation of $2.8 billion. Less than a year later, PhysicsWallah is eyeing a valuation of nearly $5 billion with this IPO, despite reporting a revenue of ₹1,940 crore and a loss of about ₹1,130 crore in FY24.

Kotak Mahindra Capital, Axis Bank, and the local units of JPMorgan Chase & Co. and Goldman Sachs Group are advising on the share sale.