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The IPO of Physicswala, one of the country’s largest adtech companies, will open on Tuesday. The price band of the issue has been kept at Rs 103 to Rs 109 per share. Experts have mixed opinions on this IPO. Many experts believe that it has no merit while some say that it can be bought for a long term.
New Delhi. India’s well-known adtech company PhysicsWallah is going to enter the stock market on this Tuesday i.e. 11th November. The company’s IPO of Rs 3,480 crore will open for investors, the price band of which has been kept at Rs 103 to Rs 109 per share. This issue will close on 13th November, share allotment on 14th November and listing on 18th November. Before the IPO launch, global firm Think Investments has invested more than Rs 136 crore in the company. At the same time, its premium in the gray market is stable at around 2.75%, which is currently considered normal in terms of demand.
Brokerage firms have given mixed opinion on Physicswala’s IPO. Some have called it a long-term opportunity, while others have adopted a neutral stance. SBI Securities has given ‘neutral’ rating on the IPO. The firm says that Physicswala is one of the top 5 education tech companies in India, but its net loss has increased from Rs 81 crore in FY23 to Rs 216 crore in FY25. The brokerage believes that the 9.7x EV/Sales multiple at the upper price band of Rs 109 is appropriate, but it will be important to keep an eye on the long-term profitability of the company.
Opinion from Angel One and Incred Equities
Angel One has also given ‘Neutral’ rating and said that valuation of the company on P/E ratio is not possible, as it is currently in loss. However, the brokerage also acknowledged that PW’s brand recall and revenue growth are strong, but the cost of scaling and competition could put pressure on its earnings. Whereas Incred Equities has advised to ‘subscribe’ to this IPO. He believes that PW is changing the face of tech and education industry. According to the firm, the 10.7x EV/Sales valuation is reasonable compared to other digital companies like Policybazaar (PB Fintech) and Nykaa. Incred says that PW’s presence on both online and offline fronts makes it different from other edtech companies.
Bullish outlook for SMIFS
SMIFS has described Physicswala as “India’s fastest growing education company”. The report states that between FY23 and FY25, the company’s paid user base has grown at a CAGR of 59% to 4.46 million. The company now has 303 offline centers and plans to increase it to 500 in the next three years. According to the brokerage, PW’s innovation-based ecosystem like AI Guru, Smart Doubt Engine and AI Grader gives the company an edge on the technology front. Also, more than 6,200 faculty and 500+ tech teams make it scalable. SMIFS believes that PW can become India’s largest education company in the coming 4-5 years, hence they have advised to ‘long-term subscribe’ it.
GMP (Grey Market Premium)
GMP of unlisted shares of the company is running at Rs 4 on Monday. If this GMP remains then the share may be listed at Rs 113 as per the upper end of the issue price. However, after the IPO opens, there may be a sharp change in GMP. Remember that GMP is not a formal price, it is just a price based on speculations. This means what price investors are willing to pay for that share before listing. However, before investing in any IPO, you should check the fundamentals of the company. Also, investment should be made only after thoroughly reading the financial documents related to the company.
