PhysicsWallah Announces IPO Plans to Raise Rs 3,820 Crore
PhysicsWallah, the renowned edtech unicorn, has submitted its draft proposal to the Securities and Exchange Board of India (SEBI) with the goal of generating Rs 3,820 crore via an initial public offering (IPO). An analysis of its financial records reveals a notable reduction in losses, bolstered by substantial revenue increases across various channels, including online, offline, and hybrid formats.
Revenue Growth Overview
PhysicsWallah’s operational revenue surged by nearly 49%, reaching Rs 2,887 crore in FY25, compared to Rs 1,941 crore in FY24, as detailed in its restated consolidated financial statement presented in the Draft Red Herring Prospectus (DRHP). The coaching services segment remained the primary source of income, contributing Rs 2,498.5 crore. Within this segment, online revenues climbed by 45.5% to Rs 1,404 crore in FY25 from Rs 965 crore in the previous fiscal year, while offline coaching witnessed a 45.7% increase, rising to Rs 1,352 crore from Rs 928 crore.
Average Revenue Per User (ARPU) Insights
The Average Revenue Per User (ARPU) in the offline category consistently improved, advancing from Rs 34,467 in FY23 to Rs 40,405 in FY25. This progression highlights the strengthening of PhysicsWallah’s hybrid and offline presence, which the company ventured into only in FY23. Notably, the offline segment now constitutes nearly 47% of the total revenue.
Additional Revenue Streams
Revenue generated from hostel fees and transportation amounted to Rs 88 crore, while product sales soared by 74%, reaching Rs 259 crore in FY25. Geographically, India continued to be the primary market, accounting for Rs 2,851 crore, or 98.75% of overall operating revenue. In contrast, Dubai and the USA together contributed Rs 36 crore, equating to 1.25% of total revenue.
Growth in Workforce
During this period, PhysicsWallah’s workforce expanded significantly. The number of faculty members rose to 5,096 in FY25, marking a 40% increase from 3,654 in FY24. Out of this total, there were 4,207 permanent teachers and 889 contractual hires.
Expense Management
On the expenditure front, to accommodate the larger teaching staff and other personnel, the company’s salary expenses escalated by nearly 28%, reaching Rs 1,426 crore in FY25—representing 44% of its total costs. Marketing expenses came to Rs 448 crore for the fiscal year, while Rs 123 crore was spent on materials and Rs 366 crore was allocated for depreciation. Overall, PhysicsWallah maintained a relatively stable expenditure of Rs 3,265 crore in FY25, a slight decrease from Rs 3,279 crore in FY24.
Burn Rate and Financial Metrics
Thanks to prudent expense control alongside revenue growth, PhysicsWallah successfully reduced its burn rate by an impressive 78.5%, dropping to Rs 243 crore in FY25 from Rs 1,131 crore in FY24. Furthermore, the company reported a positive EBITDA of Rs 192.5 crore in FY25, translating to an EBITDA margin of 6.33%. The Return on Capital Employed (ROCE) was recorded at -6.37%. On a per-unit basis, the firm spent Rs 1.13 to earn a rupee in FY25, a significant improvement from Rs 1.69 in FY24. As of March 2025, the company held current assets valued at Rs 2,237 crore, which included Rs 175 crore in cash and bank balances.
Political Contributions
In an interesting development, the company disclosed a political contribution amounting to Rs 37 lakh during FY25, which included Rs 28.7 lakh to the CPI and Rs 5 lakh to the BJP.
According to the DRHP, co-founders Alakh Pandey and Prateek Boob each hold significant stakes of 40.35%, followed by WestBridge Capital with 7.8%. Other investors include Hornbill Capital, GSV Ventures, and Lightspeed, holding 4.42%, 2.85%, and 1.79% respectively.
Strategic Acquisition
In a strategic move, PhysicsWallah acquired a 40% stake in the UPSC coaching institute, Sarrthi IAS. This development was exclusively reported by Startup Superb on September 5.
