Tepid Market Reactions as PhysicsWallah IPO Launches Tomorrow

Post by : Bianca Suleiman

Tomorrow marks the opening of the highly anticipated initial public offering (IPO) for PhysicsWallah, set for November 11. This event is pivotal for India's burgeoning edtech industry. Although investor interest remains, initial data indicates a lukewarm response for this platform that offers affordable test-prep courses.

Shares of PhysicsWallah were trading in the grey market at a modest 2.75% premium over the IPO price, a notable drop from 3.67% just a day before and 4.59% from the previous week, according to Investorgain. Further insights from IPO Watch revealed a similar trend, with a 3.66% premium, suggesting that initial excitement may be waning ahead of the listing.

The company seeks to generate Rs 3,480 crore through this offering, featuring a fresh issue of Rs 3,100 crore alongside an offer for sale (OFS) worth Rs 380 crore. The IPO will be open until November 13, with shares priced between Rs 103–109. Investors can bid for at least 137 shares, leading to a minimum investment of Rs 14,933 at the higher price point.

At the peak price range, PhysicsWallah aims for a valuation exceeding Rs 31,500 crore. Allotment results are expected by November 14, and shares are forecasted to debut on the stock exchanges on November 18.

Founded by Alakh Pandey and Prateek Boob, PhysicsWallah has swiftly ascended to become one of India's leading edtech firms by revenue, providing a combination of online and offline educational offerings. Nevertheless, its financial documents reveal escalating losses—from Rs 81 crore in FY23 to Rs 216 crore projected in FY25—partly influenced by rising depreciation and impairment costs.

Experts suggest the IPO is reasonably valued but express concerns regarding its capacity to maintain growth amid fierce competition in the edtech field. The reliance on the founders and the necessity to keep pace with shifting exam modalities pose ongoing challenges.

As the subscription phase commences, investors will be keenly observing whether PhysicsWallah's proven success in the classroom can successfully convert into market performance.