PhysicsWallah IPO subscribed 9% on Day 2 so far, GMP signals tepid listing: Should you apply?

Physics Wallah IPO

The initial public offering of PhysicsWallah continued to see muted investor interest during its second day of public bidding today, November 12. The Rs 3,480-crore IPO has been subscribed 9 percent on Day 2 so far.

The maiden public issue of the company received bids for 1.75 crore shares, as against an offer size of 18.62 crore shares, according to data on NSE at 11 am. Retail investors have booked 44 percent of their reserved portion, while Non Institutional Investors (NII) subscribed 3 percent of the portion kept for them.

Qualified Institutional Buyers (QIB) are yet to make any substantial bid for the IPO.

PhysicsWallah IPO GMP:

Ahead of listing, the unlisted shares of the company were trading with 1.38 percent grey market premium (GMP) over the IPO price, according to data on Investorgain. This is lower than the 3.67 percent GMP quoted by the site during the weekend, and 4.59 percent quoted last week.

According to IPO Watch, the unlisted shares of the company were trading with less than 1 percent GMP over the IPO price, ahead of listing.

About PhysicsWallah IPO:

PhysicsWallah launched its IPO to raise Rs 3,480 crore through a fresh issue of shares worth Rs 3,100 crore and an offer for sale (OFS) of shares worth Rs 380 crore. The IPO will remain open for public bidding between November 11 and November 13 at a price band of Rs 103-109 per share.

Investors can bid for a minimum of 137 shares, requiring an investment of Rs 14,933 at the upper price band, and in multiples thereafter. The company is targeting a valuation of over Rs 31,500 crore at the upper end of the price range.

The allotments will likely be finalized by November 14, and the shares are scheduled to list on stock exchanges on November 18.

SBI Securities on PhysicsWallah IPO:

SBI Securities remains 'Neutral' on the IPO, adding that it would like to monitor the performance of the company post listing. The domestic brokerage noted that the company which offers test-preparation courses for competitive examinations and other upskilling courses is among the top 5 edtech companies in terms of revenue in India.

However, PhysicsWallah's net loss widened from Rs 81 crore in FY23 to Rs 216 crore in FY25 due to higher depreciation expenses and impairment losses on financial assets. "At upper price band of Rs 109, the issue is valued at EV/Sales multiple of 9.7x based on the post-issue capital, which seems fairly valued," SBI Securities said.

Angel One on PhysicsWallah IPO:

Angel One said that PhysicsWallah's financials cannot be compared on a P/E basis as it remains a loss-making company, with no listed like-to-like peers in the Indian ed-tech space. "While the company continues to deliver strong revenue growth and enjoys high brand recall, profitability remains constrained by rising competition and elevated scaling costs. Hence, we assign a 'Neutral' rating, recommending investors to wait for clearer earnings visibility before taking a long-term position," it said.

Angel One also noted that execution challenges from rapid offline expansion along with continued losses and uncertain profitability remain key risks to the IPO.

Also read: Brokerages cautious on PhysicsWallah's valuation, profitability

InCred Equities on PhysicsWallah IPO:

InCred Equities recommended subscription to PhysicsWallah IPO, as it expects profitability over the medium- to long-term as the business scales up. It noted that the firm has demonstrated significant growth over the years in both online and offline business verticals.

“The valuation of PW seems to be stretched but looking at the strong moat and topline/business expansion, the company is well-placed to disrupt the edtech space,” it said. However, while noting down the downside risks, InCred listed brand reputation among the student community is sensitive, dependence on the promoter’s face value, and high attrition rate of the faculty/talent.

"At its upper-band valuation, PW trades at a premium to traditional education players like MT Educare or CL Educate, justified only if its growth sustains above 25–30% CAGR in the next three years. The listing will test whether India’s edtech can transform from valuation-driven exuberance to long-term, profit-backed credibility," said Harshal Dasani, Business Head, INVasset PMS.

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