Ishita Jain
Summary: PhysicsWallah’s November 18, 2025 listing offers a useful case study of India’s IPO framework, particularly the confidential pre-filing process, use of proceeds and the distinction between headline subscription figures and institutional demand. The company, which began with online physics lectures recorded in a rented room, listed at ₹145 against its IPO price of ₹109, representing a 33% jump despite the issue being subscribed only 1.81 times. PhysicsWallah filed its confidential DRHP in March 2025, received SEBI clearance in July 2025 and subsequently filed its public DRHP to raise about ₹3,480 crore, comprising a ₹3,100 crore fresh issue and a ₹380 crore offer for sale by founders Alakh Pandey and Prateek Boob. Its revenue grew by approximately 49% year-on-year to ₹2,887 crore in FY25, while its losses declined by around 79%. The article highlights the proposed allocation of ₹460.55 crore towards capital expenditure for the fit-outs of new offline and hybrid centres and ₹548.31 crore towards meeting lease-payment obligations of the company’s existing identified offline and hybrid centres, along with planned expenditure on subsidiaries, cloud computing and marketing. It also examines the subscription mix: the retail portion was subscribed 1.06 times, the non-institutional investor portion was subscribed 0.48 times and the QIB portion, excluding the anchor investor portion, was subscribed 2.70 times. The discussion argues that confidential pre-filing can provide founder-backed companies with greater flexibility and preliminary SEBI feedback before public disclosure, while also raising questions about transparency and accountability. PhysicsWallah is ultimately presented as a practical example of how a founder-led Indian company operates within the SEBI ICDR framework and why subscription multiples alone may not accurately reflect investor sentiment.
Introduction
On November 18, 2025, a business born out of a YouTube channel rang the opening bell on Dalal Street. PhysicsWallah, an educational test-preparation platform that began with online physics lectures recorded in a rented room, listed at ₹145 against its IPO price of ₹109. That represented a 33% jump for a stock whose IPO was subscribed only 1.81 times. That contrast captures the story in its entirety. Weak subscription figures and a substantial listing gain do not ordinarily go together. Understanding the reasons behind this phenomenon will provide a better understanding of the SEBI IPO process than any textbook can offer.
The Company That Filed Quietly
Unlike most companies that go public in India, PhysicsWallah did not begin the process with a publicly available Draft Red Herring Prospectus (DRHP). Most companies follow the public filing route, which exposes their financial figures to speculation, scrutiny and every business reporter with access to a Bloomberg terminal. PhysicsWallah, however, took a more discreet approach by making use of the ICDR framework prescribed by SEBI, under which a company may confidentially file its draft offer document with SEBI and make it public when it is closer to execution.
PhysicsWallah filed its confidential DRHP in March 2025, received SEBI’s observations in July 2025 and subsequently filed its public DRHP to raise about ₹3,480 crore, comprising a ₹3,100 crore fresh issue and a ₹380 crore offer for sale by founders Alakh Pandey and Prateek Boob.
Here is where it gets interesting: the confidential pre-filing route was created precisely to allow a company to withdraw without having publicly disclosed that it was considering an IPO. At least one large Indian company that followed the same confidential process did exactly that—it filed confidentially for a proposed listing and later withdrew its plans without fanfare. PhysicsWallah did not need this escape route. However, the fact that it retained this option throughout the confidential stage reveals how founder-managed companies are beginning to view an IPO: not as a single, irrevocable step, but as a process from which they can withdraw until a relatively advanced stage.
What the Prospectus Actually Said
Cut through the market clutter, and the story told by the RHP is that of a relatively well-managed growth journey. The company’s revenue grew by approximately 49% year-on-year to ₹2,887 crore in FY25. Its losses, meanwhile, declined by around 79% during the same period—the kind of financial trajectory a company should demonstrate if it relies on SEBI’s QIB route for issuers that do not satisfy the profitability criteria.
The use of proceeds is where the real signal lies, but it can easily be overlooked. Approximately ₹460.55 crore was earmarked for capital expenditure relating to the fit-outs of new offline and hybrid centres, while ₹548.31 crore was allocated for meeting the lease-payment obligations of the company’s existing identified offline and hybrid centres. Further funding was allocated to subsidiaries such as Xylem Learning and towards increasing the company’s ownership stake in Utkarsh Classes & Edutech. Substantial investments were also planned for cloud computing and marketing. This does not reflect the expenditure pattern of an organisation focused solely on acquiring users and pursuing growth at any cost.
The Subscription Number Nobody Should Trust Alone
Here is where many articles about IPO listing day fall into the trap of lazy clichés. An overall subscription of 1.81 times sounds modest compared with IPOs that have been subscribed 50 times or more. Retail participation was limited, with the retail portion subscribed only 1.06 times. The non-institutional investor portion was subscribed 0.48 times. The QIB portion, excluding the anchor investor portion, was subscribed 2.70 times. It was this institutional demand that helped push the stock to a listing gain of 33%.
That is the kind of detail IPO recap articles often fail to highlight. The overall subscription multiple is a headline figure; two IPOs may both close with a subscription of 1.81 times but represent entirely different situations depending on who submitted the bids. When institutions lead while retail investors play catch-up, it indicates that sophisticated market participants may value the stock more highly than the general public does.
The Argument I Would Actually Make
If I had to take a position instead of merely summarising the timeline, it would be this: the confidential pre-filing process ought to become the norm, rather than the exception, for founder-backed Indian companies that have incurred losses in recent periods.
Under the conventional public DRHP route, a company is required to disclose its financial position to the public from the outset, regardless of whether the proposed IPO ultimately proceeds. This places the company in an awkward position: it must either delay filing until its financial performance can withstand market scrutiny or file publicly and hope that market conditions remain favourable until the RHP is issued. By choosing the confidential route, PhysicsWallah was able to obtain SEBI’s feedback on its draft offer document. It may also have been able to address SEBI’s questions regarding its narrowing but continuing losses without immediately subjecting its responses to public scrutiny from grey-market traders and other market participants.
The obvious counterpoint is that confidentiality appears to conflict with one of the central purposes of market regulation—accountability. Public-market investors should arguably be able to observe how a company responds to difficult regulatory questions, rather than seeing only its final answers.
However, considering the extent of the disclosure burden and the fact that retail investors—as evident from this IPO—may not be the participants primarily driving price discovery, the practical case for confidentiality merits serious consideration. In the prevailing framework, institutional QIBs play a significant role in price discovery through anchor allocation and QIB bidding. It is therefore reasonable for detailed disclosure and regulatory scrutiny to occur before the public filing stage, provided that all material information is fully disclosed before investors are invited to subscribe.
Why This Is Worth More Than a Market Recap
For those preparing for a career in corporate finance, M&A, private equity or venture capital, the PhysicsWallah IPO offers a well-rounded example of several important concepts: the confidential filing process in practice, a detailed use-of-proceeds disclosure that can be studied closely and a stock listing that demonstrates why subscription multiples should not be confused with investor sentiment.
It was neither the largest IPO of the year nor the most heavily subscribed. However, as a learning example of how a founder-led Indian company operates within the SEBI ICDR framework, it is as instructive a case as one could hope to find in the market.
Disclaimer: This article is intended solely for educational and informational purposes and is based on publicly available information, including the company’s offer documents and reported stock-exchange data. It does not constitute investment, legal, financial or professional advice, or a recommendation to subscribe to, purchase, sell or hold any security. Readers should independently verify the information, consider subsequent developments and consult a qualified professional before making any investment or financial decision. The author and publisher shall not be responsible for any loss arising from reliance on this article.
