PhysicsWallah IPO Debut: Grey Market Gains Show Promise, But Will Investors Profit?

Edtech platform PhysicsWallah is set for its stock market debut following a modest IPO subscription of 1.92 times. The grey market premium suggests a potential listing day gain of around 12-13%, though this is not guaranteed.

November 18 marks the stock market debut of PhysicsWallah, one of India's most popular edtech platforms. Founded by Alakh Pandey, the brand has become a household name for students preparing for JEE, NEET, and other competitive exams, thanks to its mix of free online content and affordable offline classes.

Despite its popularity, the IPO received a modest subscription, suggesting that investors are approaching cautiously.

From YouTube to Edtech Powerhouse

What started as a humble YouTube channel has now grown into a hybrid learning platform, combining free online lessons with paid offline coaching. This model has helped PhysicsWallah stand out in a sector where many competitors struggle to turn a profit.

Grey Market Shows Some Optimism

Ahead of the listing, the grey market premium (GMP) has bounced back, giving investors a hint of optimism. As of November 18, the GMP stood at Rs 14, implying a potential listing price of Rs 123 per share against the IPO's upper price of Rs 109. This suggests a possible 12–13% gain on listing day if momentum holds.

However, analysts caution that the grey market is just an informal indicator and doesn't guarantee actual listing returns.

How the IPO Subscribed

The IPO was subscribed 1.92 times overall, with retail investors at 1.14x, institutional buyers at 2.86x, and non-institutional investors lagging at 0.51x. While subscription was moderate, institutional interest shows confidence in the company's long-term potential.

The IPO price band was Rs 103–109 per share, with a lot size of 137 shares. Employee allocation included 7,52,688 shares at a Rs 10 discount. Kotak Mahindra Capital and MUFG Intime India Pvt. Ltd. managed the issue.

Brokerages Offer Mixed Views

• InCred Equities: 'Subscribe' – citing a strong business model and digital reach, though valuation at 10.7x EV/Sales seems high.
• SBI Securities: 'Neutral' – fair valuation but profitability pressures exist.
• Anand Rathi: 'Subscribe – Long Term' – the hybrid model and regional expansion provide growth opportunities.

What Investors Need to Know

The grey market indicates a potential short-term gain, but long-term success depends on how PhysicsWallah performs after listing. Strengths like brand recognition and a hybrid business model are promising, but investors should remain mindful of risks, including profitability pressures and reliance on Alakh Pandey's persona.