PhysicsWallah Files Rs 3,820 Crore IPO, Discloses Unique Risk Factors
EdTech platform PhysicsWallah has filed a DRHP with SEBI for an IPO worth Rs 3,820 crore. The company reported increased total income of Rs 2,886.00 crore and reduced net losses to Rs 240.00 crore. Cofounders Alakh Pandey and Prateek Maheshwari each hold about 40.35% stake. PhysicsWallah serves over 2 million students annually, focusing on Tier-II and Tier-III cities. The DRHP uniquely discloses student safety incidents at offline centers as risk factors. Kotak, JP Morgan, Goldman Sachs, and Axis Capital are appointed as book-running lead managers for the IPO.
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EdTech platform PhysicsWallah Ltd. has taken a significant step towards going public by filing a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) worth Rs 3,820 crore.
Financial Performance
The company reported a substantial increase in total income, rising to Rs 2,886.00 crore from Rs 1,940.00 crore in the previous fiscal year. Notably, PhysicsWallah has managed to narrow its net losses significantly, from Rs 1,127.00 crore to Rs 240.00 crore.
Ownership Structure
Cofounders Alakh Pandey and Prateek Maheshwari each hold a substantial stake in the company, with approximately 40.35% ownership each.
Business Overview
PhysicsWallah has established a strong presence in the EdTech sector, particularly in Tier-II and Tier-III cities. The company serves over 2 million students annually through various brands, including Knowledge Planet, Xylem Learning, and Utkarsh Classes.
Unique Risk Factors
In an unusual move, PhysicsWallah has disclosed several student safety incidents at its offline learning centres as risk factors in its DRHP. These incidents include:
- A student threatening faculty with a slipper during a video call
- A staff member pushing a student, resulting in the staff member's termination
- A ceiling fan falling on a student at a New Delhi centre
These disclosures highlight the company's transparency in addressing potential risks associated with its offline operations.
IPO Details
For the IPO process, PhysicsWallah has appointed several prominent financial institutions as book-running lead managers:
- Kotak
- JP Morgan
- Goldman Sachs
- Axis Capital
The involvement of these well-known financial institutions suggests a high level of interest in PhysicsWallah's public offering.
As the EdTech landscape continues to evolve, PhysicsWallah's IPO filing marks a significant milestone for the company and the sector at large. Investors and industry observers will likely keep a close eye on how the market responds to this offering, particularly given the company's unique risk disclosures and its strong presence in non-metropolitan areas of India.
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