Significant anchor investor backing sets stage for PhysicsWallah’s IPO

Edtech unicorn PhysicsWallah’s (PW) initial public offering (IPO) has drawn strong attention from institutional investors, setting a firm tone ahead of its public subscription window.

The company allocated 14.34 crore equity shares to anchor investors at Rs 109 per share, raising about Rs 1,563 crore according to disclosures to stock exchanges. 

Investor response to the anchor tranche was notably high, with the total bid value approaching Rs 20,000 crore, indicating coverage of nearly 13 times.

A notable share of this allocation went to domestic asset managers. Around 7.95 crore shares, representing 55.48% of the anchor book, were taken up by 14 mutual funds through a total of 35 schemes. This tranche alone accounted for approximately Rs 867 crore. 

Prominent domestic participants included ICICI Prudential, Kotak Mahindra, Nippon India, Motilal Oswal and Aditya Birla Sun Life fund houses. International investors such as Smallcap World Fund, Goldman Sachs India Equity Portfolio and several Templeton-managed emerging market and small cap funds also featured.

The public issue opens on Tuesday, November 11, and closes on Thursday, November 13.

The company plans to raise Rs 3,480 crore through the issue. This includes a fresh capital infusion of Rs 3,100 crore alongside an offer-for-sale of Rs 380 crore, in which co-founders Alakh Pandey and Prateek Boob will sell a portion of their holdings.

The price band has been fixed at Rs 103 to Rs 109 per share, implying a valuation of more than Rs 31,500 crore at the top end. Following the offer, the company intends to list its shares on both the BSE and NSE on November 18.

Another indicator of institutional interest emerged shortly before the offer launch. Global investment firm Think Investments acquired shares worth Rs 136 crore in a secondary transaction last week. The deal was struck at Rs 127 per share, which represents roughly a 17% premium to the IPO’s upper price band.

PhysicsWallah has evolved considerably since Pandey began posting physics lessons on a whiteboard via YouTube. 

Today, it operates at a scale approached only by Eruditus among Indian edtech firms, with revenue nearing Rs 3,000 crore supported by a strong digital platform and a rapidly expanding network of offline and hybrid learning centres.

Its core strength lies in catering to students preparing for competitive entrance examinations in engineering, medicine, and government recruitment, particularly in Tier II and Tier III geographies. The company has positioned itself on affordability and targeted pedagogy, which has helped it scale without resorting to disproportionate marketing expenditure.

The broader edtech landscape has been undergoing a period of adjustment after rapid pandemic-era growth. Several online learning companies have struggled with high operating costs, valuation corrections and tighter investor scrutiny. 

PW’s focus on sustainable operations, disciplined offline expansion and restrained spending on student acquisition could set it apart from rivals that prioritised rapid scale, though it still faces stiff competition in the crowded coaching and test-preparation market where both established institutes and newer digital platforms are contending for market share.