Physics Wallah, one of India's fastest growing edtech startups, has filed a Draft Red Herring Prospectus (DRHP) under the confidential pre-filing route with the Securities and Exchange Board of India (SEBI). The company is reportedly seeking to raise around Rs 4,500 crore through an initial public offering (IPO). If the IPO proceeds, Physics Wallah would become India’s first edtech player to go public. The move comes amid soaring revenues and mounting losses, reflecting both the scale of its operations and the capital-intensive nature of the business. The confidential filing route allows the firm to evaluate investor sentiment discreetly before going public.

A Strategic Step Toward Public Markets

Physics Wallah, a Noida-based edtech firm renowned for its budget-friendly, high-quality online courses, has initiated the IPO process by filing a DRHP with SEBI. However, unlike conventional filings, the company has chosen the confidential pre-filing route, a relatively new framework introduced in 2022 that allows companies to keep financials and sensitive information private until the listing plans are finalized.

While the DRHP filing is a critical milestone, the company has clarified that the submission does not necessarily confirm an IPO will take place. The filing only represents a formal intention to explore public markets.

Rs 4,500 Crore Target and the First Edtech Listing

If Physics Wallah proceeds with the listing, it is expected to raise close to Rs 4,500 crore, marking a historic moment as the first edtech firm in India to go public. The company previously raised $210 million in 2024 at a valuation of $2.8 billion, reflecting robust investor confidence.

The IPO could also serve as a litmus test for India’s edtech sector, which has experienced a boom-bust cycle post-pandemic and is now stabilizing with a sharper focus on profitability and scale.

Revenue Surge and Profitability Challenges

Physics Wallah’s meteoric rise in the edtech landscape is underscored by its financials. The company’s operating revenue grew 160% in FY24 to reach Rs 1,940 crore, up from Rs 746 crore the previous year. This reflects the growing traction of its platform, particularly among aspirants of competitive exams such as NEET and JEE.

However, the growth has come at a cost. Losses soared nearly 13-fold from Rs 84 crore in FY23 to Rs 1,131 crore in FY24, highlighting the heavy investments in infrastructure, content creation, and offline expansion. The spike in losses also underscores the broader trend in edtech where profitability remains elusive for many fast-scaling players.

The Confidential Filing Mechanism: What It Means

Introduced by SEBI in 2022, the confidential filing route enables companies to initiate the IPO process without publicly disclosing sensitive financial and operational information during the early stages. This strategy is designed to protect firms from premature scrutiny and legal vulnerabilities.

After SEBI reviews the confidential DRHP, the company is required to make the offer document public for a minimum of 21 days, allowing stakeholders to submit feedback. If the IPO moves forward, the company can proceed with the final offer after addressing regulatory observations.

This route also provides flexibility to conduct limited marketing with institutional investors, helping companies assess demand and pricing viability before going public.

Market Context: Few Have Succeeded Post Confidential Filing

Physics Wallah is now the sixth Indian company to opt for this confidential route. Others include Tata Play, Oyo, Swiggy, and Vishal Mega Mart, among others. However, the track record has been mixed.

While Swiggy and Vishal Mega Mart eventually launched their offerings, companies like Tata Play and Oyo have yet to proceed with their IPOs. This pattern underscores the cautious sentiment among companies amid market volatility and evolving investor expectations, especially in the high-growth but loss-making sectors like edtech and tech-enabled services.

Promising Fundamentals, but Execution is Key

Physics Wallah has distinguished itself by building a mass-market education platform with a strong brand presence, particularly in Tier 2 and Tier 3 cities. Its blend of online and offline offerings, combined with affordability, has struck a chord with millions of students.

However, the upcoming IPO, if executed, will test the company’s ability to translate scale into sustainable profitability. The increased scrutiny of listed firms, coupled with investor demand for transparent governance, will require the company to streamline operations and deliver long-term value.

IPO's Success will be a Defining Moment for Indian Edtech

The confidential filing of DRHP by Physics Wallah marks a potential inflection point for India’s edtech sector. As the first in its space to pursue a public listing, the firm is stepping into uncharted territory. The success of this IPO could rejuvenate sentiment in a sector still recovering from post-pandemic headwinds.

However, with mounting losses and rising competition, the company must demonstrate not only growth but also operational discipline. Whether Physics Wallah becomes the benchmark for future edtech listings will depend on its execution in the months to come.