 "PhysicsWallah sets ₹3,480 cr IPO price band ahead of Nov 11 share sale")
Edtech startup PhysicsWallah has set a price band of Rs 103-109 for its initial public offer (IPO), which opens on November 11 and closes three days later.
The company aims to raise Rs 3,480 crore and will use most of the funds for growth. The IPO consists of a fresh issue of Rs 3,100 crore and an offer for sale (OFS) of shares aggregating up to Rs 380 crore.
The IPO is the first in homegrown edtech and will see Alakh Pandey and Pratik Boob, the promoters and co-directors of PhysicsWallah, will each offload shares worth Rs 190 crore each through the OFS. The company’s investors, including WestBridge AIF (6.40 per cent share), Hornbill Capital Partners (4.41 per cent), GSV Ventures Fund (2.85 per cent), Lightspeed Opportunity Fund (1.79 per cent), and Setu AIF Trust (1.39 per cent), are not offloading any stake.
PhysicsWallah joins companies opting for IPOs via the confidential pre-filing route. Ahead of the IPO on November 11, PhysicsWallah’s cofounders said the company draws a clear line between profit and purpose. Speaking at a press conference on Thursday, Pandey and Boob said some investors had suggested doubling the prices of their flagship courses but the company does not entertain such investors or proposals and believes in quality, affordable education.
“We have kept the prices of our flagship batches affordable because we want to enhance learning and improve access to education. We never ever wanted to increase the course price abruptly. But several times during this journey, investors have said to us that the easiest way to double the revenue is to double the prices of batches. We never entertain these kinds of investors," Boob said. He added that, given that the company is still required to give returns and generate profits, it has brought value-added services with courses.
Pandey, chief executive officer of PhysicsWallah, said the company will always focus on India, responding to a question about expanding abroad.
“We have made this commitment publicly that we will only and always educate the students of India. In the Gulf, there are Indian students who are preparing for their boards and exams like the IIT. There are a lot of students in Dubai who are from the CBSE board. We educate them. The same goes with the USA. It is not just our choice; we will have to do that because Indian students have a lot of expectations from us," Pandey said.
PhysicsWallah's rise and the planned public debut is in contrast to Byju's, which lost focus amid aggressive expansion.
The company plans to use the majority of proceeds for marketing initiatives (Rs 710 crore), for lease payments of existing identified offline and hybrid centers (Rs 548.3 crore), expansion of offline centres (Rs 460.5 crore), and for server and cloud-related infrastructure costs (Rs 200.1 crore)
OTT platform
Ahead of the IPO, PhysicsWallah launched an education streaming platform called PW Pi OTT. The monthly subscription for the in-app service costs Rs 299, and a six-month subscription is priced at Rs 1,500. Prateek Boob said even if the competitive exam courses are priced at around Rs 4,000-6,000, the cost is still unaffordable to a large section of students. In addition, he said there is a lot of distraction on social media, and the newly-launched platform provides a focused study environment.