PhysicsWallah’s $5 Billion IPO Marks Edtech Sector Revival
PhysicsWallah Ltd’s spectacular stock market debut has ignited hopes for an edtech sector revival, with its 33% premium listing potentially unlocking much-needed capital for online learning startups after years of funding drought.
Key Highlights
- PhysicsWallah listed at ₹44,000 crore ($5B) valuation with 33% premium
- IPO subscribed 1.92x with strong institutional interest
- Edtech funding collapsed from $4.15B in 2021 to $141M in 2025
- Company commands 10x revenue multiple despite hybrid model
The Westbridge Capital-backed firm raised ₹3,100 crore in its IPO, with shares opening at ₹145 on NSE and ₹143.90 on BSE against the issue price of ₹109 per share. This performance contrasts sharply with the struggles of former sector leaders Byju’s and Unacademy.
Validation of Core Edtech Model
Siddharth Pai, founding partner at 3one4 Capital, views PhysicsWallah’s debut as validation of the original edtech thesis. “Each of them had different reasons why they tanked,” he said, attributing Byju’s collapse to governance issues and over-extension, while Unacademy suffered from COVID-era overvaluation and business challenges post-reopening.
PhysicsWallah demonstrated that edtech companies can acquire students cost-effectively, maintain profitability before major funding, and grow without unsustainable marketing spends.
Valuation Debate Intensifies
The company’s valuation at over 10 times FY25 revenue of ₹2,887 crore represents a pure tech multiple, despite its nearly equal online-offline revenue split. Pradyumna Nag of Prequate Advisory notes this “fractured hybrid” model traditionally commands lower multiples, with offline education players historically struggling to sustain beyond 3-5 times revenue.
According to PhysicsWallah’s DRHP, FY25 revenue was split 48-49% from digital courses and 47% from physical centers, with offline ARPU exceeding ₹40,000 compared to under ₹4,000 online.
Learning from Past Mistakes
The edtech sector has already experienced one cycle of irrational exuberance. During the COVID boom (2020-2022), Byju’s raised over $3 billion, reaching a $22 billion valuation, while Unacademy hit $3.44 billion. Today, Byju’s faces insolvency proceedings and Unacademy considers selling its test prep business for just $300-400 million.
Pai emphasizes that PhysicsWallah’s long-term success depends on realistic guidance and consistent performance. “The thing that will hurt them in the long run is if they end up giving exuberant guidance and miss it consistently,” he warned.
New Benchmark for Sector
Growth-stage funds now treat PhysicsWallah’s IPO as the reference point for education businesses blending online scale with offline centers. An anonymous edtech founder reported that investors consistently reference PhysicsWallah’s performance as the new benchmark for sector valuation.
Mukul Rustagi, CEO of Classplus, stated: “PhysicsWallah’s IPO is a very clear benchmark. Private investors will recalibrate how they identify, evaluate and value edtech investments based on how this stock trades.”
He added that public markets will determine whether the current 10x sales multiple is sustainable or if corrections are needed, setting the tone for edtech valuation for the next 1-2 years.
