Shares of PhysicsWallah, a prominent edtech brand in India, are set to debut on the stock market today, attracting interest from retail investors and market analysts. Despite the company’s strong brand recognition and dedicated student following, its initial public offering (IPO) saw a moderate subscription, indicating cautious investor sentiment.
Established by Alakh Pandey, PhysicsWallah has gained widespread popularity among students preparing for competitive exams like JEE and NEET. What started as a YouTube channel has evolved into a significant edtech platform offering a blend of free online resources and cost-effective offline classes, distinguishing itself in a sector where many competitors have faced profitability challenges.
The grey market premium (GMP) for PhysicsWallah shares has shown some improvement before the listing. After a period of stability, it has recently risen, suggesting a slightly more positive outlook. As of November 18, the latest GMP stands at Rs 14, hinting at a potential listing price of Rs 123 per share compared to the upper issue price of Rs 109, potentially yielding a gain of approximately 12.84% if the trend continues post-listing.
However, analysts caution that the grey market serves as an informal indicator and may not always accurately predict actual listing performance. The IPO of PhysicsWallah garnered a total subscription of 1.92 times, with retail investors subscribing 1.14 times, qualified institutional buyers (QIBs) portion 2.86 times, and non-institutional investors (NIIs) segment 0.51 times by November 13.
While the subscription levels were not exceptionally high, analysts noted the institutional investors’ participation as a sign of confidence in the company’s long-term prospects. The IPO price band ranged from Rs 103 to Rs 109 per share, with a lot size of 137 shares requiring a minimum investment of Rs 14,933 at the upper end. The issue also included a reserved portion of 7,52,688 shares for employees at a discounted rate of Rs 10 per share.
Brokerages have expressed varied opinions on the IPO, with some recommending it for long-term investors while others advise caution. InCred Equities sees strength in PhysicsWallah’s business model, highlighting its large digital audience and freemium strategy. SBI Securities takes a neutral stance due to valuation concerns and profitability pressures, while Anand Rathi offers a positive outlook on the hybrid model’s potential for long-term growth.
It’s important to note that the views and recommendations shared by experts and brokerages in this article are their own and not endorsed by the India Today Group. It is advisable to consult a financial advisor before making any investment decisions.