The initial public offering of edtech unicorn PhysicsWallah Ltd continues its journey through the bidding process, entering the second day with cautious investor response. The IPO, which opened for subscription on Tuesday, November 11, has witnessed lukewarm demand from investors so far, reflecting the current market sentiment toward edtech companies.
IPO Subscription Status: Day 2 Update
As of 11:55 AM on Wednesday, the PhysicsWallah IPO has been subscribed only 10% overall, according to data from the National Stock Exchange. The breakdown reveals interesting patterns across investor categories. Retail Individual Investors (RIIs) have shown relatively better interest with 47% subscription, while Non Institutional Investors (NII) have subscribed only 4% of their allocated portion. Notably, Qualified Institutional Buyers (QIBs) have yet to place their bids for the issue.
The bidding window for the PhysicsWallah IPO will remain open until Thursday, November 13. Market watchers expect the allotment date to be around November 14, with the official listing scheduled for November 18. The company's shares will be available for trading on both major Indian stock exchanges - BSE and NSE.
Financial Details and Company Valuation
PhysicsWallah aims to raise ₹3,480 crore through this book-building issue, which comprises two components. The fresh issue involves 28.44 crore equity shares worth ₹3,100 crore, while the offer-for-sale (OFS) component includes 3.49 crore equity shares aggregating to ₹380 crore.
The company has set the IPO price band at ₹103 to ₹109 per share. For retail investors, the minimum investment required is ₹14,933, with a lot size of 137 shares. Kotak Mahindra Capital Co. Ltd. serves as the book running lead manager, while MUFG Intime India Pvt. Ltd. acts as the IPO registrar.
Grey Market Premium and Analyst Recommendations
The unlisted market shows a muted trend for PhysicsWallah shares, with the grey market premium (GMP) standing at ₹3 per share according to market experts. This indicates that in the grey market, PhysicsWallah shares are trading at approximately ₹112 apiece, representing a modest 2.75% premium to the upper end of the IPO price band.
Analysts have expressed mixed views on the IPO. Mehta Equities noted that at the upper price band of ₹109, the issue demands a market capitalization of ₹31,527 crore. Based on FY2025 actuals, the company is valued at approximately 10.4x market-cap-to-sales, which the brokerage considers aggressively priced.
However, the firm acknowledged PhysicsWallah's strong fundamentals, stating: "We believe open-access model, strong conversion funnel from free to paid users, and diversified offerings across 13 education categories and 7 languages offer significant long-term growth potential." They recommend the IPO only for risk-tolerant investors with a long-term perspective.
Deven Choksey Research presents a more optimistic view, highlighting that the PhysicsWallah IPO is priced at a P/Revenue multiple of 7.5x on TTM basis, reflecting its rapid growth in subscriptions and user base. "Despite historical losses and governance concerns, the company's strong brand, community-driven model, and expansion strategy support subscription for listing gains," the brokerage stated, recommending a 'Subscribe' rating.
Company Performance and Growth Strategy
PhysicsWallah has demonstrated impressive revenue growth, reporting 160.7% increase in FY24 and 48.7% in FY25. However, the company remains loss-making due to substantial investments in offline expansion and new business verticals. This makes traditional valuation metrics such as P/E ratio less relevant for assessment.
The company's expansion strategy appears well-calculated, targeting India's vast education market. According to analyst estimates, PhysicsWallah currently addresses only about 1.5% of its total addressable student base of approximately 30 crore, indicating significant room for future growth.
The proceeds from the fresh issue will primarily fund inorganic growth opportunities and technology enhancements, aligning with sector trends favoring hybrid learning models and increased digital penetration in education.
