Physicswallah Limited has strengthened its position in Xylem Learning Private Limited through a strategic amendment to their existing shareholders agreement. The company's board of directors approved the third amendment, marking another significant step in the ongoing acquisition process.

Key Acquisition Details

The third amendment facilitates the acquisition of an additional 930 equity shares from existing shareholders, representing a substantial increase in ownership stake. This transaction builds upon the original shareholders agreement entered into on June 17, 2023, which has been previously amended on June 18, 2023, and February 07, 2025.

Revised Commercial Framework

The amendment introduces significant changes to the acquisition structure and valuation methodology. The tranche-wise acquisition terms have been comprehensively revised, including modifications to the number of equity shares proposed for acquisition under remaining tranches.

The valuation mechanism has undergone a fundamental shift, with the framework now based exclusively on EBITDA metrics. Key changes include:

• 100% weightage assigned to EBITDA for valuation purposes
• Increased EBITDA valuation multiples for remaining tranches
• Elimination of revenue metrics from the valuation framework

Strategic Alignment

According to the company's disclosure, these amendments are designed to align the acquisition schedule and commercial terms with Physicswallah's strategic objectives. The revised structure provides greater clarity and focus on profitability metrics rather than revenue-based valuations.

Regulatory Compliance

The transaction falls within the ambit of related party transactions and is conducted at arm's length, given Xylem's status as a subsidiary of Physicswallah Limited.

The parties to the amended agreement include Physicswallah Limited, Xylem Learning Private Limited, and individual shareholders Mr. Anthu Sasikumar, Mr. Vinesh Kumar Karuvarathpoyil, and Mr. Lijeeshkumar Valiyaparambil. This strategic acquisition reinforces Physicswallah's commitment to expanding its educational technology portfolio through controlled subsidiary operations.

PhysicsWallah , the edtech company, has announced strategic plans to optimize its marketing expenditure while simultaneously expanding its physical presence across India.

Marketing Spend Optimization

The company intends to reduce its marketing spend in the coming year, aiming for a more efficient allocation of resources:

This reduction in marketing expenditure demonstrates PhysicsWallah's focus on improving operational efficiency and potentially boosting profitability.

Expansion Plans

Despite the planned reduction in marketing spend, PhysicsWallah is not slowing down its growth initiatives. The company has outlined an ambitious expansion strategy:

• New Centers: PhysicsWallah plans to open 75 new centers in the next year.
• Geographic Reach: This expansion is expected to increase the company's physical presence across India, potentially reaching more students and diversifying its revenue streams.

Financial Outlook

PhysicsWallah has expressed optimism about its financial performance:

• Q3 Expectations: The company anticipates that the third quarter will be its strongest performing period.
• Profitability: PhysicsWallah expects to achieve profitability, although specific timelines or targets have not been disclosed.

This combination of cost optimization and expansion suggests that PhysicsWallah is pursuing a balanced approach to growth, aiming to improve its financial metrics while continuing to invest in its physical infrastructure.

The edtech sector has faced challenges in recent times, with many companies struggling to maintain growth and profitability. PhysicsWallah's strategy of reducing marketing spend while expanding its offline presence could be seen as an adaptive approach to the changing market dynamics in the education technology space.

As the company moves forward with these plans, it will be interesting to observe how the reduction in marketing spend impacts its user acquisition and whether the expansion of physical centers contributes significantly to revenue growth and profitability.