India’s largest listed edtech company, PhysicsWallah (PW), has abandoned plans to directly lend to students through its finance subsidiary and will instead partner with regulated lenders, marking a significant shift in its student financing strategy.
The development comes just days after the company announced an investment of approximately Rs 120 crore (approximately GDP £10.3 million) into FinZ Finance, its wholly owned subsidiary that received a non-banking financial company (NBFC) licence from the Reserve Bank of India in September 2025 and began operations earlier this year.
The company has now partnered with multiple regulated non-bank lenders to support student financing.
“PhysicsWallah wishes to inform the exchanges that it is restructuring its lending strategy and has tied up with multiple leading regulated third-party NBFCs to enable student lending needs,” the company said.
Our lending business is best left to regulated third-party NBFCs who have created robust underwriting capabilities
Prateek Maheshwari, PhysicsWallah
Under the revised model, PW will continue to function as a technology platform, connecting students with a curated network of lending partners based on their learning journey and academic outcomes. The company said the approach would materially reduce balance-sheet and credit-related risks.
Explaining the decision, co-founder Prateek Maheshwari said the company had received feedback that its strengths lie in education and community building rather than lending.
“We received feedback from our partners that our core strength lies in building communities and our online business. Our lending business is best left to regulated third-party NBFCs who have created robust underwriting capabilities,” said Maheshwari.
“We truly believe that prudent capital allocation and shareholder value remains our foremost priority and, in light of the feedback received from our partners, we have exercised our responsibility to revisit this decision and enable student lending through regulated third-party NBFCs.”
The company added that the future direction of FinZ Finance will be decided at a later date, subject to board and regulatory approvals.
Investors appeared to welcome the move, with PhysicsWallah’s shares rising by as much as 17% following the announcement.
The decision marks a notable shift for a company that has positioned itself as one of India’s fastest-growing education businesses.
In November 2025, PhysicsWallah became India’s first pure-play edtech unicorn to go public, seeking a valuation of around USD $3.6 billion and distinguishing itself from rivals that struggled amid a broader downturn in the sector.
PhysicsWallah’s stock market debut came as some of India’s largest edtech companies faced mounting challenges.
Byju’s remains embroiled in insolvency proceedings and legal disputes, while rivals including Unacademy have grappled with slowing growth and restructuring, with the company now awaiting approval for a proposed merger with upGrad.
The latest move comes as investor scrutiny of edtech business models has intensified, particularly around profitability, risk exposure and long-term sustainability.
PhysicsWallah also reported strong financial results for the quarter ended March 2026, with revenue increasing 51% year-on-year to Rs 919 crore (GDP £78.5 million), while losses narrowed by 76% to Rs 69 crore (£5.9 million).
At the time of its IPO, co-founder Alakh Pandey said disciplined growth would remain a priority as the company expanded its physical learning centre network across India.
“I want this company to be run with discipline, to grow responsibly, and to make it public in a way that benefits everyone. We are in a hyper-growth phase, and as we expand, we don’t want to slow down or fail to deliver,” Pandey said.
