By Abhay Ray 
Introduction
The Indian EdTech industry has seen rapid growth in recent years, with several startups reaching unicorn status and making a significant impact on the educational landscape. One of the notable success stories is PhysicsWallah, an EdTech company that has transformed the way students access learning materials and coaching. Founded in 2020, PhysicsWallah has quickly risen to prominence by offering affordable, high-quality educational content, catering to a wide audience across India. Now, the company is preparing to take a major step in its growth journey: launching its Initial Public Offering (IPO).
PhysicsWallah has recently filed its draft IPO papers with the Securities and Exchange Board of India (SEBI) through the confidential filing route, a method that has gained popularity among companies in recent years. According to sources, the IPO could raise up to $500 million (approximately ₹4,600 crore). The offering will include the issuance of new equity shares, along with an Offer for Sale (OFS) component, providing an exit route for existing investors. abhayray.com
Confidential Filing Route – A Growing Trend in Volatile Markets
The confidential filing route allows companies to submit their draft IPO papers to SEBI without making public disclosure of sensitive financial information. This option provides companies with the flexibility to assess market conditions and determine if proceeding with an IPO is the right move. If a company opts for the confidential route, it can revise the primary issue size by up to 50% before moving to the final stage of the IPO process.
For PhysicsWallah, the decision to go for the confidential filing route is strategic, as it allows the company to test the waters and decide on the timing and size of the IPO. This option also provides more flexibility, as the company has up to 18 months from SEBI’s final comments to launch the IPO. This is a stark contrast to the traditional filing route, which requires companies to go public within 12 months of receiving SEBI approval.
PhysicsWallah joins a selected group of companies, including Swiggy, Vishal Mega Mart, and OYO, that have used the confidential filing route for their IPOs. The trend of confidential filings is growing, especially among new-age companies that operate in sectors like technology, food delivery, and EdTech. The method offers a way for these companies to keep sensitive details private while preparing for a potential IPO.
A Growing EdTech Giant with Massive Reach
Since its inception, PhysicsWallah has carved a niche in India’s competitive education sector. The company provides online, offline, and hybrid learning modes, making education accessible to students across the country. With a presence in nearly 98% of India’s pin codes, the company has been successful in reaching a vast audience, particularly in smaller towns and rural areas where access to quality education has been limited. In September 2024, PhysicsWallah raised $210 million in a funding round led by Hornbill Capital. This funding round boosted the company’s valuation to $2.8 billion, more than doubling its previous valuation. The company’s strong growth and market potential make it an attractive investment opportunity for both institutional and retail investors. Physics Wallah (PW), reported a significant financial setback in FY24, experiencing a consolidated net loss of ₹1,131.2 crore, a dramatic increase compared to the previous year’s loss of ₹84.06 crore, despite a 2.6x surge in revenue. Physics Wallah’s revenue from operations surged to ₹1,940.4 crore in FY24, a 2.6-fold increase compared to ₹744.3 crore in FY23.
The Road Ahead – IPO and Beyond
PhysicsWallah’s IPO plans are still in the early stages, and while the confidential filing route allows for flexibility, the company will need to carefully evaluate market conditions before moving forward. The EdTech sector has seen its ups and downs, with market volatility influencing the timing of several IPOs. However, with its solid backing from investors like WestBridge Capital, Lightspeed Venture Partners, and GSV Ventures, PhysicsWallah is poised to attract significant interest from the public markets when the time comes.
For now, the company has filed its draft IPO papers and appointed top investment banks, including Kotak Mahindra Capital, JP Morgan, Axis Bank, and Goldman Sachs, to guide it through the IPO process. As PhysicsWallah continues to grow and expand its influence in the EdTech industry, the upcoming IPO could be a major milestone in its journey to becoming one of India’s leading publicly traded companies.
Conclusion
PhysicsWallah’s decision to file for an IPO through the confidential route signals its ambition to grow and reach new heights in the Indian market. As the company continues to build on its success, the IPO could be a significant step toward solidifying its position in India’s booming EdTech industry. Investors will be closely watching the company’s progress, as PhysicsWallah’s public listing could inspire other EdTech startups to follow suit in the years to come.
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