PhysicsWallah IPO: Worth subscribing to?

Summary: PhysicsWallah, a popular learning and test preparation platform, will go public on November 11, 2025. Though it might have become a household name, a lack of strong track record and revenue concentration pose risks to its growth. Let’s analyse its strengths, weaknesses and past financials to assess whether its IPO is worth subscribing to.

PhysicsWallah, a platform offering test preparation courses for competitive exams in India, is set to open its IPO (initial public offering) on November 11, 2025 and will close on November 13, 2025. The company aims to raise Rs 3,480 crore, of which Rs 3,100 crore comprises a fresh issue while the remaining Rs 380 crore will be an offer for sale (OFS).

We breakdown PhysicsWallah’s business, financials, strengths, risks and valuation to help you make an informed investment decision.

What the company does

Headquartered in Noida, PhysicsWallah offers affordable test-preparation and upskilling courses through online, offline and hybrid modes. Its two-teacher model combines live digital classes with on-site academic support. With over 13.7 million subscribers on its flagship YouTube channel and a total YouTube community nearing 99 million, it has built one of India’s largest learning ecosystems.

The company’s content-first, tech-enabled approach and extensive network of free and paid courses have made it one of India’s top five education firms by revenue and one of the fastest-growing between FY23 and FY25.

Track record and valuation

Regarding its numbers, PhysicsWallah’s financial performance has largely been disappointing. Between FY23 and FY25, its EBIT (earnings before interest and tax) and net income (profit after tax) remained in the red. Only revenue grew steadily, posting a nearly 97 per cent growth during the same period.

At the upper end of the price band (Rs 109), PhysicsWallah’s stock is expected to be valued at 6.8 times its book value. The P/E cannot be calculated since the company incurred losses during FY23-25. There are no listed peers for comparison.

The good

Here are some of the company’s positives.

#1 Growing customer base

PhysicsWallah has built one of India’s largest student communities by blending affordability with technology. Its paid user base surged to 4.46 million in FY25, growing at a robust 59 per cent CAGR since FY23. The platform’s digital-first approach, offering many free courses alongside paid ones, has helped convert engagement into revenue. With over 98 million YouTube subscribers across 207 channels, including 13.7 million on its main channel, PhysicsWallah stands among India’s top five education companies by revenue, offering some of the most affordable test-prep courses for JEE, NEET and UPSC aspirants.

#2 Widespread reach

PhysicsWallah has expanded its reach across 13 education categories as of June 2025, up from six in FY23. Its courses span the entire learning journey, from school-level foundation batches to professional skill development. Students can prepare for key competitive exams like JEE, NEET, GATE, CUET, CAT and UPSC through online, offline and hybrid models. The platform also offers specialised upskilling programmes in multiple areas, making it a comprehensive education provider.

The bad

Though it has emerged as one of the most popular educational platforms, PhysicsWallah faces certain risks.

#1 Muted financials

Despite rapid expansion, PhysicsWallah continues to report losses, with a restated loss of Rs 127 crore for Q1 FY26 and Rs 1,131 crore for FY24. The company also posted negative EBITDA and net worth in FY24.

Since launching in 2020 with JEE and NEET courses, it has diversified into 13 education categories and acquired firms such as Xylem and Utkarsh Classes. However, rising costs from hiring, ESOPs, advertising, technology upgrades and centre expansion have weighed on profitability even as revenues continue to grow.

#2 Heavy reliance on key exam categories poses growth risks

A large share of PhysicsWallah’s online students come from key categories: NEET (26.6 per cent), JEE (15.6 per cent), government exams (12.3 per cent) and foundation courses (17.6 per cent) as of Q1 FY26. Sustained demand for these exams is crucial to its growth. Thus, any decline in interest, exam format changes or delayed updates to course material could impact PhysicsWallah’s enrolments, revenue and cash flows.

#3 Revenue concentrated in a handful of regions

PhysicsWallah earns a large share of its offline revenue from centres in key cities such as Delhi NCR, Patna, Kota, Calicut, Lucknow, and Kolkata. A slowdown in expansion or overreliance on these locations could expose the company to geographic concentration risks, potentially affecting growth and operations.

Where will the IPO proceeds go?

Here’s how PhysicsWallah plans to utilise its fresh issue size of Rs 3,100 crore:

• Around Rs 461 crore has been allocated for investing in the company’s new offline and hybrid centres
• Nearly Rs 548 crore will be directed towards lease payments of PhysicsWallah’s existing teaching centres
• Rs 47 crore will be invested in Xylem Learning, one of PhysicsWallah’s subsidiaries
• Around Rs 28 crore has been earmarked for the lease payment of Utkarsh Classes & Edutech, another one of PhysicsWallah’s subsidiaries
• Another Rs 27 crore has been allocated by PhysicsWallah for Utkarsh Classes & Edutech, to increase its existing stake
• Over Rs 200 crore will be invested in the company’s cloud infrastructure
• Rs 710 crore will be utilised for PhysicsWallah’s marketing initiatives

The remaining funds, if any, will be directed towards unidentified acquisitions and general corporate purposes.

So, should you apply to the PhysicsWallah IPO?

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Also read: Pine Labs IPO: Should you apply?