PhysicsWallah may launch ₹3,820cr IPO within weeks
What's the story
Leading Indian edtech company, PhysicsWallah, is gearing up for an initial public offering (IPO) worth ₹3,820 crore, according to Bloomberg. The WestBridge Capital LLP and Hornbill Capital Partners-backed firm has already met potential investors and could launch the deal within weeks. The proposed offering will comprise a fresh issue of equity shares worth ₹3,100 crore and an offer for sale (OFS) by existing shareholders worth ₹720 crore.
Ownership breakdown
Founders own 40.35% stake each
The founders of PhysicsWallah, Alakh Pandey and Prateek Boob, each own a 40.35% stake in the company. WestBridge Capital LLP holds a 6.41% stake while Hornbill Capital Partners owns a 4.42% stake, as per the company's draft prospectus. The pre-filing of draft papers was approved by the Securities and Exchange Board of India (SEBI) in July this year through a confidential route that allows companies to seek regulatory review before making their offer documents public.
Fund allocation
Fresh issue proceeds to be utilized for various purposes
The proceeds from the fresh issue will be allocated for different purposes. This includes ₹710 crore for marketing initiatives, ₹548 crore for lease payments of existing offline and hybrid centers, ₹460 crore for capital expenditure on new centers, and ₹471 crore for investment in subsidiary Xylem Learning Pvt Ltd. The platform offers test preparation and upskilling courses with a paid user base of 44.6 lakh in FY25.
Market position
Company raised $210 million in September last year
In September 2024, PhysicsWallah raised $210 million at a valuation of $2.8 billion. Now, less than a year later, the company is eyeing a valuation of nearly $5 billion with this IPO. This comes despite reporting revenue of ₹1,940 crore and a loss of about ₹1,130 crore in FY24. Kotak Mahindra Capital Co., Axis Bank Ltd., and local units of JPMorgan Chase & Co., Goldman Sachs Group are advising on the share sale.