PhysicsWallah IPO opens to tepid response on first day of subscription

The initial public offering (IPO) of edtech firm PhysicsWallah (PW) opened to investors on Tuesday with a muted response on the first day of bidding. 

According to cumulative demand data available on the Bombay Stock Exchange’s public issue monitoring page, the issue was subscribed approximately 0.07 times in total by the close of Day 1.

Overall, the issue received bids for about 1.31 crore shares against roughly 18.62 crore shares on offer, indicating that investors placed bids for about 7% of the shares available across all categories.

The retail investor category showed the most visible participation, with subscriptions amounting to roughly 0.33 times the portion reserved for individual investors. So around one third of the retail quota was taken up by the end of the first day.

However, interest among non-institutional investors, including high-net-worth individuals, was notably limited, with their portion subscribed around 0.02 times. The segment reserved for qualified institutional buyers recorded negligible interest, with bids yet to meaningfully register.

Institutional investment is often seen as an indicator of broader confidence in an issue, so the absence of early demand from large investors will be viewed closely as the subscription period progresses over the next two days. The public issue closes on Thursday, November 13.

The employee reserved category was subscribed about 1.11 times, with applications totalling around 8.36 lakh shares against the 7.52 lakh shares on offer, indicating comparatively stronger participation from eligible employees on the first day.

Earlier on Monday, November 10, PW’s IPO received strong attention from institutional investors, with the company allocating 14.34 crore equity shares to anchor investors at Rs 109 per share, raising about Rs 1,563 crore.

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.

PW is seeking to raise approximately Rs 3,480 crore through the offering. The majority of the issue, estimated at around Rs 3,100 crore, consists of a fresh issue of shares intended to fund expansion of educational infrastructure, investments in digital platforms, possible acquisitions and general corporate purposes.

A smaller component involves an offer for sale of Rs 380 crore, in which co-founders Alakh Pandey and Prateek Maheshwari 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.

The first day’s demand suggests a cautious stance among market participants, particularly those in the larger ticket categories. The next two days of bidding will provide a clearer picture of investor sentiment and the degree of confidence in the company.

It is common for public issues to see most of their bidding activity concentrated on the second and third days of the subscription window. Investors often observe early subscription trends, market movement and any analyst commentary before placing final bids.

PW 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 around Rs 3,000 crore supported by a strong digital platform and a rapidly expanding network of offline and hybrid learning centres.

The company’s 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.

PW’s growth has come amidst the broader edtech landscape, 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.