IPOs have dominated startup conversations this year. However, unlike the AI buzz, an IPO is all about proving a business is ready for public scrutiny. Few sectors need that credibility more than edtech, which has swung from pandemic-fuelled boom to painful corrections.
PhysicsWallah (PW)—which has now filed papers with the Securities and Exchange Board of India (SEBI) for an initial public offering worth Rs 3,820 crore—is viewed as the torchbearer that could put the industry back in a positive light. What began with Alakh Pandey teaching physics on a whiteboard on YouTube has grown into a billion-dollar company now preparing to test the public markets.
PW’s planned listing is a moment of reckoning for the Indian edtech sector. After bruising years dominated by BYJU’S troubles, the draft prospectus filed by the company has become a proxy for the sector’s credibility.
If PW can show predictable earnings, disciplined customer acquisition, and governance that survives quarterly scrutiny, its IPO will open the door for more credible domestic listings. If it falters, scepticism will deepen, valuations will tighten, and the wait for another positive signal will only get longer.
As Ashwin Damera, Co-founder and CEO at Eruditus, puts it, “PW’s listing shows Indian edtech has entered a new phase from high-growth startups to businesses with scale and profitability… Public markets are the natural progression for firms with strong unit economics. Not all players are ready, but for the top few, IPOs are now within reach.”
A test of maturity
PhysicsWallah’s planned listing will be both a milestone and an experiment. PW’s move towards the public market forces a single, practical question: Can an edtech company convert its rapid growth into steady profits and robust governance at scale?
“Investors will look at edtech through a sharper lens on profitability, cash flows, and governance, rather than just growth,” says Damera, noting the sector will need to explain metrics, such as student acquisition cost, lifetime value, and learning outcomes, as they are not always standard in financial markets.
Anil Joshi, Founder and Managing Partner of Unicorn India Ventures, is circumspect when he says that PW’s performance does not automatically mean the whole sector has matured.
“True industry maturity is reflected when multiple companies demonstrate consistent, sustainable business models, predictable revenues, and investor confidence across the sector… PW’s performance will lay the path for many to follow and build sectoral maturity. However, currently it will be premature to assume so,” he says.
What markets want
Indian stock markets prize repeatability above narrative. Bankers and institutional investors will press for clean unit economics and a clear line of sight on seasonality, as education revenues are not uniform throughout the year.
As Vikram Gupta, Founder and Managing Partner of IvyCap Ventures, highlights, “From an IPO perspective, the demand-supply is slightly skewed because there is a large pipeline of IPOs right now, and there is only so much capital out there which is looking to invest. The IPO pricing in itself may not necessarily be a true reflection of the real value of the companies.”
A senior edtech executive, who wishes to remain anonymous, highlights a practical negotiation point regarding pricing. “I think that is the only challenge in PW’s road to IPO. They should be a little flexible on the valuation. At least what I have been hearing seems to be that they are a little bit stiff on the valuation ask.”
At the same time, fellow founder and CEO Vamsi Krishna of Vedantu stresses a different payoff of listing. “It is very necessary and important, especially after all the fiascos and the constant flurry of negative news. Someone doing an IPO and doing well is really something the sector needs.”
Krishna says, “The spending propensity of parents in India is among the highest in the world as a percentage of take-home income. When that is the case, educational spending will continue to grow, so there is a business to be made.”
Delving further into partnerships and credibility, Krishna adds, “The only change which might happen is with some of these B2B or government tie-ups. Being listed will lend much more credibility to do those things,” arguing that listed status reduces perceived counterparty risk for institutional partners.
Valuation and discipline
Valuation will be the immediate battleground. The Indian institutional market remains wary of loss-making businesses entering the market, especially in a cycle where dollar capital has retreated.
Gupta captures that outlook bluntly. “Institutional capital in India is still very critical of the loss-making companies coming for IPOs.” He adds that test preparation has historically been one of the more profitable edtech subsectors and, therefore, will be watched even more closely.
Joshi returns attention to governance. “Trust is not something one can suddenly manufacture at IPO; it is built from day one through culture, processes, and leadership behaviour. The public market demands a different discipline compared to private capital.” That practical warning matters because the market will demand consistent quarterly visibility that many startups are still learning to provide.
Ripple effects
A well-executed offer would do more than reward one founding team. Gupta suggests it would provide benchmarking that many private companies currently lack. “If they do well after the IPO, one has to watch over a six to twelve-month period to see how it performs. That should open the gates for many other companies, who have been waiting and watching.”
Krishna expects a sentiment lift that reaches beyond test preparation. “Good news should be there, and at least there is some semblance of it happening… It will improve the sentiment for the sector and also for the investors,” he says.
But the mirror image is real. If the listing disappoints, capital may retrench, and consolidation could accelerate as investors look for safer, more disciplined bets.
For consumers, the clear upside is stronger protection and transparency. Damera says parents and students can expect “greater accountability, stricter compliance, and long-term focus. Listed companies will prioritise transparency in pricing, refunds, and outcomes.”
What lies ahead
PW’s IPO will ultimately be judged on execution and its performance in the following quarters. The filing is not a magic wand for a sector that has already absorbed hard lessons on governance and valuation. It is an invitation to prove that a large consumer education business can operate with the discipline public investors demand.
Damera sees both opportunity and risk. He notes that a successful listing can unlock domestic capital pools, reduce reliance on global venture funds, and strengthen the sector’s credibility. The challenge, he cautions, lies in sustaining performance under public scrutiny, particularly in a business with revenues tied to academic cycles.
Joshi argues that the importance goes beyond a single company. “The listing is important not only for the sector but for the overall startup ecosystem. We need to witness many such companies build strong performance and then explore listing, thereby generating value for all stakeholders. The successful listing of PW will certainly help build investor sentiment around the edtech sector.”
Gupta stresses, “PhysicsWallah will be viewed as a trend setter and one of the few real winners in the space,” he says. Still, expectations are tempered. “I don’t think one successful IPO will immediately open the floodgates…. But it will give investors some comfort, and it can start to override the negative perceptions built up after the BYJU’S episode.”
For now, the draft prospectus is only the beginning. Success will change the conversation and set new benchmarks for the industry. A stumble will lengthen the wait for more listings. Either way, all eyes will be watching closely.
(Cover image designed by Nihar Apte)
Edited by Suman Singh
