PhysicsWallah, the Noida-based edtech unicorn, is one step closer to launching its much-anticipated initial public offering (IPO). After filing its Draft Red Herring Prospectus (DRHP) confidentially in March, the company recently received approval from the Securities and Exchange Board of India (SEBI) to proceed with its IPO. This development paves the way for the company to file a public version of the DRHP and take the next major step toward becoming a publicly traded entity.
The approval from SEBI signals a crucial milestone in the company’s IPO journey, which is set to raise approximately Rs 4,600 crore, predominantly through an Offer for Sale (OFS). PhysicsWallah’s move to go public reflects the growing maturity of India’s edtech sector and its ability to generate significant investor interest.
PhysicsWallah’s Journey Toward Going Public
PhysicsWallah, founded by Alakh Pandey, has become one of India’s leading edtech startups, providing affordable and high-quality educational content primarily focused on competitive exams like JEE and NEET. As a profitable unicorn, PhysicsWallah stands out as one of the few edtech companies to maintain profitability while expanding its user base.
In March, PhysicsWallah chose the confidential pre-filing route to submit its IPO papers to SEBI. This alternative to the traditional IPO process allows companies to submit their DRHP privately before making it public. By opting for this route, PhysicsWallah can keep details of its IPO confidential, with the DRHP being publicly disclosed later in the process. This approach provides the company with more flexibility and less immediate public scrutiny during the initial stages of its IPO journey.
SEBI’s Green Light for PhysicsWallah’s IPO
After a detailed review, SEBI issued its observations on July 18, granting the green light for PhysicsWallah to proceed with the next steps in its IPO process. SEBI’s approval is a critical step in the process, as it enables the company to file a public version of the DRHP, which will contain essential details about the company’s finances, business operations, and the offering.
With SEBI’s clearance, PhysicsWallah now has a limited window to launch its IPO. Under the confidential pre-filing route, the company has 18 months from the date of its confidential filing to initiate the IPO process. If the company does not proceed with its IPO within this period, the entire process must be restarted.
PhysicsWallah’s IPO Structure: Offer for Sale (OFS) and Fresh Issue
The Rs 4,600 crore IPO that PhysicsWallah plans to raise will predominantly consist of an Offer for Sale (OFS), where existing shareholders will sell their shares. In an OFS, the proceeds from the sale of shares go directly to the selling shareholders, rather than the company itself. The company will not raise fresh capital through the offer, which means that the IPO will mainly allow the existing investors to exit or reduce their stake in the company.
While the OFS will dominate the offering, there is also a possibility of a fresh issue of shares, enabling PhysicsWallah to raise funds for its business operations. This dual approach is common in IPOs, as it provides liquidity for existing investors while also allowing the company to raise funds for future growth and expansion.
Key Appointments and Company Growth Ahead of IPO
As part of its IPO preparations, PhysicsWallah has been making significant strategic hires. In addition to appointing three independent directors—Deepak Amitabh, Rachna Dikshit, and Nitin Savara—the company has also bolstered its leadership team. In recent months, PhysicsWallah brought Satish Sharma onboard as its Chief Marketing Officer, Ajinkya Jain as Group General Counsel, Company Secretary, and Compliance Officer, and Amit Sachdeva, the former CFO of Blinkit, as the Chief Financial Officer.
These key hires reflect PhysicsWallah’s focus on strengthening its leadership team as it prepares for its IPO. Such appointments are crucial for ensuring that the company meets SEBI’s regulatory requirements, as it seeks to position itself for long-term growth and success as a publicly traded entity.
PhysicsWallah: A Valuable Edtech Unicorn
PhysicsWallah’s journey to an IPO is a testament to the company’s impressive growth trajectory. With a valuation of $3.7 billion after its most recent funding round, PhysicsWallah has solidified its position as one of India’s leading edtech firms. The company’s growth has been fueled by its commitment to providing high-quality education at affordable prices, a business model that resonates with millions of students preparing for competitive exams across the country.
PhysicsWallah’s profitability, strong user engagement, and ability to attract top-tier investors have made it one of the most valuable edtech startups in India. As the company moves closer to its IPO, its market value could increase further, making it an even more prominent player in the Indian edtech ecosystem.