PhysicsWallah Gets SEBI Nod for IPO: A New Chapter in Indian EdTech

PhysicsWallah, the leading Indian edtech unicorn, has received official approval from the Securities and Exchange Board of India (SEBI) for its Initial Public Offering (IPO). This approval marks a crucial turning point in the company’s journey from a humble YouTube channel to a multi-billion-dollar education platform. The IPO, which will raise approximately Rs.4,600 crore (about $533 million), will include both a fresh issue of equity shares and an offer for sale (OFS). Notably, PhysicsWallah is the first Indian edtech unicorn to head toward the public market, signifying a breakthrough for the country’s digital education sector. The company had filed for the IPO through SEBI’s confidential pre-filing route in March 2025, and the green signal came on July 18, as per the regulator’s official update.

SEBI’s Confidential Pre-Filing Route: A Strategic IPO Tool

Background: Why the Pre-Filing Route Was Introduced

In a bid to modernize India’s capital markets and make the IPO process more startup-friendly, the Securities and Exchange Board of India (SEBI) introduced the confidential pre-filing route in 2022. This mechanism was designed to give companies especially high-growth startups more flexibility and privacy in their IPO preparation journey. Prior to this reform, companies had to make their Draft Red Herring Prospectus (DRHP) public immediately after filing, which often led to early scrutiny, media attention, and competitive risks, even before the IPO timeline was confirmed.

To learn more about SEBI new ICDR rules related to IPO read – link

What Is the Confidential Pre-Filing Route?

Under the confidential pre-filing process, companies are allowed to submit their draft DRHP privately to SEBI. Unlike the regular route, the submitted documents are not available to the public or competitors until the company decides to move forward with the IPO. This means that the regulator can review the documents, seek clarifications, and suggest changes in a non-public environment, helping the company resolve potential concerns discreetly.

Benefits of Confidential Filing for Companies

There are several benefits to using this route, particularly for startups and technology-led businesses:

• Reduced Market Pressure: Since the DRHP is not immediately visible to investors or the media, companies can avoid undue pressure and speculation.

• Risk Management: If market conditions turn unfavourable or the company decides to delay the IPO, it can quietly withdraw or postpone the process without reputational damage.

• Regulatory Feedback in Private: SEBI can issue observations or ask for clarifications, and companies can address them behind closed doors before going public.

• Strategic Timing: This route allows companies to choose the best market window for launching the IPO after addressing all compliance and financial disclosures.

This approach also brings Indian markets in line with global IPO standards, such as those followed by the U.S. Securities and Exchange Commission (SEC), which has long permitted confidential filings for certain types of public offerings.

PhysicsWallah’s Use of the Pre-Filing Route

PhysicsWallah took advantage of this confidential process in March 2025, becoming one of the few Indian startups to adopt this route. The company submitted its draft IPO papers to SEBI under the pre-filing format, seeking feedback before formally releasing it to the public. Within just four months, SEBI reviewed and cleared the application, officially granting approval on July 18, 2025.

This quick approval especially under the confidential route highlights both the strength of PhysicsWallah’s documentation and SEBI’s efficiency in processing IPO filings under the revised framework. It also places PhysicsWallah alongside a select group of tech companies such as Swiggy, which used this route earlier and received similar regulatory clearance.

Significance of SEBI’s Approval in Record Time

Receiving approval in just four months is considered one of the fastest turnarounds in recent IPO cases. This reflects not only the robustness of PhysicsWallah’s internal governance, financial preparedness, and disclosures, but also the effectiveness of the pre-filing mechanism as a time-efficient tool. For a sector like edtech, where the financial model, growth strategy, and regulatory clarity are often under scrutiny, such a quick nod also builds investor confidence and market credibility.

Breakdown of the IPO Structure

The total IPO size is pegged at around Rs.4,600 crore (roughly $532.8 million). The public offering will consist of two parts fresh issuance of shares and offer for sale (OFS) by existing investors. The fresh issue will help the company raise capital for expansion, technology upgrades, and operational costs. The OFS component will allow current stakeholders to partially exit or monetize their holdings. Although the detailed breakdown of both components is not publicly available yet, reports suggest that a significant portion may be allocated to OFS. Industry insiders believe this IPO could value PhysicsWallah at approximately $3.7 billion, up from its last reported valuation of $2.8 billion.

PhysicsWallah’s Financial Snapshot: Robust Revenue Growth with Surging Losses

PhysicsWallah has demonstrated impressive growth in revenue, indicating strong market acceptance and rapid business expansion. For the financial year 2023–24 (FY24), the company reported a total revenue of Rs.1,940.4 crore, marking a substantial 2.6 times increase from its revenue of Rs.744.3 crore in FY23. This spike reflects the company’s widening footprint in India’s education sector, particularly through the success of its online courses, hybrid learning model, and expanding offline centres. The surge in revenue also highlights the growing demand for affordable and high-quality competitive exam preparation solutions among students in Tier-2 and Tier-3 cities PhysicsWallah’s core audience.

Soaring Losses Raise Profitability Concerns

However, the rapid top-line growth has come at a significant cost. The company’s net losses soared from Rs.84.06 crore in FY23 to Rs.1,131.2 crore in FY24, representing a 13.5x increase in just one year. This steep rise in losses suggests that while PhysicsWallah is scaling its operations aggressively, it is also burning considerable capital. Several factors could be contributing to this growing cash burn, including heavy investments in physical infrastructure for offline centres, expansion of its teaching and support teams, technology upgrades, and marketing efforts, especially in the run-up to its IPO. Such expenditures, although essential for long-term positioning and scalability, have weighed heavily on the company’s profitability.

Awaiting FY25 Financial Disclosures

As of now, PhysicsWallah has not yet released its financial results for FY25, which will likely offer a clearer picture of the company’s cost controls, monetization strategies, and the effectiveness of its capital deployment. These financials are expected to be included in the updated Draft Red Herring Prospectus (DRHP) that the company will publish publicly following SEBI’s approval. The FY25 figures will be closely watched by potential investors and analysts, as they could influence investor sentiment and valuation in the lead-up to the IPO.

Key Corporate Moves by PhysicsWallah Ahead of IPO

As PhysicsWallah geared up for its Initial Public Offering (IPO), the company made a series of strategic corporate changes to align itself with regulatory requirements and investor expectations. These changes were essential for establishing strong governance, ensuring transparency, and presenting a robust leadership framework to the public markets.

Conversion to a Public Limited Company

One of the first and most critical steps in the IPO journey was the conversion of PhysicsWallah from a private limited company to a public limited company. This transition was completed earlier in 2025 and is a mandatory legal requirement under the Companies Act, 2013 for any organization planning to list its shares on a recognized Indian stock exchange such as NSE or BSE. The conversion process involved (MoA) and (AoA), updating the company’s name to reflect its new public status, and complying with additional disclosure and compliance norms. By becoming a public limited company, PhysicsWallah signaled its readiness to operate under greater public scrutiny and regulatory oversight, a key expectation for listed entities.

Board Restructuring and Enhanced Corporate Governance

In March 2025, PhysicsWallah undertook a significant overhaul of its board structure by appointing three independent directors. This move was part of the company's efforts to comply with corporate governance norms as prescribed under SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations. Independent directors play a crucial role in ensuring objectivity and impartiality in board decisions, especially in companies preparing to go public. Their presence is also important for enhancing board accountability, protecting the interests of minority shareholders, and bringing in diverse experience from other sectors. By strengthening its board composition, PhysicsWallah demonstrated a clear commitment to adopting transparent and investor-friendly governance practices, which are vital for gaining the trust of public market participants.

Strategic Appointment of Chief Marketing Officer (CMO)

To further reinforce its executive leadership, PhysicsWallah announced the appointment of Satish Sharma as Chief Marketing Officer (CMO) in June 2025. This strategic hire was aimed at enhancing the company’s brand positioning, marketing communications, and go-to-market strategy, particularly as it prepares for its IPO. Mr. Sharma brings extensive experience in brand building, digital outreach, and marketing strategy skills that are important for a rapidly scaling edtech platform entering the public spotlight. His role includes overseeing marketing campaigns, increasing user acquisition, managing public relations, and improving investor engagement. The timing of this appointment just months before the IPO underscores the company’s proactive approach in ensuring that its public listing is supported by a strong narrative, cohesive brand identity, and effective market visibility.

Product and Operational Innovations

AI Tool Launch – Aryabhata 1.0

As part of its edtech innovation, PhysicsWallah launched Aryabhata 1.0, an AI-powered learning assistant designed to help students prepare more efficiently for the JEE Mains examination. This technology integration reflects the company’s focus on improving learning outcomes and modernizing its academic offerings.

Focus on Offline Expansion

PhysicsWallah is making significant investments in its offline business model, with expectations of generating over Rs.1,000 crore from physical learning centers in FY25. The company is expanding its centers across existing and new cities, offering hybrid learning to meet student demand for in-person guidance alongside digital tools.

MoU with Delhi Government

In a socially impactful move, PhysicsWallah signed a Memorandum of Understanding (MoU) with the Delhi Government to provide free online coaching for NEET and CUET exams. The program will benefit over 1.6 lakh students, showing the company’s commitment to inclusive education.

Strong Investor Backing

PhysicsWallah is backed by some of the world’s most respected venture capital firms, including Lightspeed Venture Partners, WestBridge Capital, Hornbill Capital, and GSV Ventures. The company entered the unicorn club in 2022 after raising $100 million in Series A funding, and it continues to attract investor interest thanks to its strong brand and large user base.

PhysicsWallah and the Pre-Filing Trend Among Startups

PhysicsWallah is the second Indian tech startup to use the pre-filing route, following Swiggy, which received SEBI approval in September 2024. Other startups like AceVector (Snapdeal’s parent), Shadowfax, and boAt have also opted for this route. The rising use of confidential filings shows how startups prefer to work behind the scenes before making their IPO intentions public. It helps them avoid unwanted publicity during sensitive business phases and correct regulatory issues without market pressure.

India’s IPO Market Is Heating Up in 2025

After a slow start to the year, the Indian IPO market is witnessing a sharp revival. In July 2025 alone, ten companies have already listed, and three more are in the process. Alongside PhysicsWallah, SEBI has approved IPOs for WeWork India, Veeda Clinical Research, and Seedworks International. The return of IPO momentum reflects renewed investor optimism, especially for companies in tech, research, and innovation-led sectors.

Company Background: The Story of PhysicsWallah

PhysicsWallah was founded in 2020 by Alakh Pandey, a passionate teacher who started by uploading physics tutorials on YouTube. His mission was to make quality education affordable and accessible for every student in India, especially those from Tier-2 and Tier-3 cities. From there, the platform grew rapidly into a comprehensive edtech ecosystem, offering:

• Live and recorded lectures for JEE, NEET, UPSC, and CUET

• Doubt-solving apps and forums

• Test series and competitive exam mock papers

• Study materials in multiple languages

• Offline coaching canters across India

The company is widely respected for keeping its prices low and focusing on student outcomes, even as it scales to compete with bigger edtech names.

Conclusion: A New Era for Indian EdTech

PhysicsWallah’s IPO is more than just a funding event it is a milestone for the Indian edtech sector. At a time when many edtech startups are facing financial pressure, layoffs, and investor hesitancy, PhysicsWallah’s market debut could signal renewed confidence in digital learning. The IPO will also serve as a test case for other edtech companies that are considering going public. With a large student base, a strong offline presence, powerful branding, and investor support, PhysicsWallah seems well-prepared to take on the public market challenge. If successful, it could set the stage for a new generation of education startups to dream bigger and aim for sustainable public growth.

FAQs

Q1. What was PhysicsWallah’s revenue in FY24?

Ans. In FY24 (2023–24), PhysicsWallah recorded a total revenue of Rs.1,940.4 crore, which is more than 2.6 times higher than its revenue of Rs.744.3 crore in FY23. This growth reflects the company’s expansion in both online and offline learning segments.

Q2. Did the company make a profit in FY24?

Ans. No, PhysicsWallah reported a net loss of Rs.1,131.2 crore in FY24. This is a sharp increase from its Rs.84.06 crore net loss in FY23.

Q3. Why did PhysicsWallah’s losses increase so much in one year?

Ans. The significant jump in losses 13.5 times higher than the previous year can be attributed to several factors:

• Heavy investments in offline learning centers

• Hiring of teachers and support staff

• Increased marketing and branding expenses

• Technology upgrades in preparation for the IPO

Q4. How does PhysicsWallah plan to manage these losses?

Ans. While the company hasn't publicly detailed its cost-reduction strategy, it is expected that PhysicsWallah will focus on:

• Improving operational efficiency

• Scaling revenue from offline centers

• Introducing AI tools like Aryabhata 1.0 to reduce costs and enhance learning

• Potential use of IPO funds to balance expansion and sustainability

Q5. Are the FY25 financials available?

Ans. No, the FY25 financials have not yet been released. These are expected to be published in the updated Draft Red Herring Prospectus (DRHP), which will be made public after SEBI’s confidential approval stage.

Q6. What should investors understand from these financial figures?

Ans. Investors should note that PhysicsWallah is in a high-growth phase, but also experiencing high cash burn. While revenue growth shows strong market demand, the rising losses raise questions about long-term profitability, cost control, and the viability of its offline expansion model.

Q7. Is PhysicsWallah's financial performance common among startups?

Ans. Yes, many fast-growing startups especially in the tech and edtech sectors experience high revenue and high losses during their scale-up phase. The key difference lies in how efficiently they can convert growth into sustainable profits over time.