Physics Wallah Raises INR 1,563 Crore from Anchor Investors Before IPO Launch

Physics Wallah, an edtech unicorn, announced on 10 November that it has secured INR 1,563 crore from anchor investors, one day before its initial public offering (IPO) opened. This will be the nation's first significant pure-play edtech company to list on an initial public offering (IPO). A circular posted on the BSE website states that 57 funds participated in the anchor book, including ICICI Prudential Mutual Fund (MF), Kotak Mahindra MF, Nippon India MF, Aditya Birla Sun Life, Motilal Oswal MF, Tata MF, and DSP MF, in addition to well-known international investors like Goldman Sachs, Fidelity, and Templeton.

In accordance with the circular, the business raised INR 1,562.85 crore by allocating 14.33 crore equity shares at an anchor investor offer price of INR 109 per share. Of these shares, 7.95 crore, or 55.48%, were distributed among 35 different schemes across 14 mutual funds.

Physics Wallah’s IPO Plan

From November 11 to November 13, Physics Wallah's INR 3,480-crore initial public offering will be open. For its next initial public offering (IPO), the company has set a price range of INR 103 to INR 109 per share, with the ultimate goal of a valuation of approximately INR 31,500 crore. The IPO consists of an offer-for-sale (OFS) of shares totalling up to INR 380 crore by promoters and a new issue of equity shares valued at INR 3,100 crore.

Through the OFS, Alakh Pandey and Prateek Boob, the promoters, would each sell shares valued at INR 190 crore. Both currently own 40.31% of the business. PhysicsWallah, a company situated in Noida, submitted draft documents to Sebi in March for an initial public offering (IPO) via a private pre-filing process, and in July, the market regulator approved the proposal. After that, in September, the business submitted an amended DRHP before submitting an RHP. By using the confidential pre-filing option, the company was able to delay disclosing the IPO details to the public.

How Physics Wallah Plans to Utilise Proceeds?

The funds raised will support the business's growth and expansion plans. According to Physics Wallah, of the new issue proceeds, INR 548.3 crore will be utilised for lease payments of current centres, while INR 460.5 crore will be used for the fit-out of future offline and hybrid centres. Additionally, the business plans to invest INR 47.2 crore in its subsidiary Xylem Learning, which includes INR 15.5 crore for lease payments and hostels and INR 31.6 crore for new centres. Utkarsh Classes & Edutech will receive an additional INR 33.7 crore for centre lease payments.

Furthermore, INR 710 crore is allocated for marketing campaigns, INR 200.1 crore for server and cloud infrastructure, and INR 26.5 crore for purchasing a larger interest in Utkarsh Classes.

Through tech-enabled offline centres, hybrid centres that combine online instruction with in-person support, and online platforms (YouTube, websites, and apps), Physics Wallah provides test preparation courses for competitive exams with an emphasis on JEE, NEET, GATE, and UPSC. Additionally, the organisation offers upskilling programmes.