Shares of Physicswallah, the prominent Indian ed-tech company, surged by as much as 18 percent during Thursday's trading session. The significant jump followed the company's announcement of a revised lending strategy, which includes partnering with leading regulated Non-Banking Financial Companies (NBFCs) for student financing.
Strategic Shift to Reduce Financial Risk
In an exchange filing, Physicswallah confirmed its decision to restructure its lending approach. The company will invest Rs 120 crore through an equity infusion into its wholly-owned subsidiary, FinZ Finance. However, instead of directly managing student loans, FinZ Finance will now act as a technology platform connecting Physicswallah students with a curated list of regulated third-party NBFCs.
This strategic reversal from its earlier direct lending model is intended to materially reduce balance sheet and credit-related risks for the company. Prateek Maheshwari, Co-founder of Physicswallah, stated that feedback from partners highlighted the company's core strength in building communities and online business, suggesting that the lending business is best handled by regulated third-party NBFCs with robust underwriting capabilities.
Financial Performance and Market Confidence
Despite the strong rally on Thursday, which saw shares reach Rs 108.45, Physicswallah's stock still remains below its IPO price of Rs 109 from November 2025. The company's market capitalization stands close to Rs 31,000 crore. While currently down 37 percent from its post-listing high of Rs 162.05, the stock has gained over 40 percent from its all-time low of Rs 77.75 recorded in March 2026.
Physicswallah recently reported its Q4 FY26 earnings, showcasing a 51 percent year-over-year increase in operational revenue to Rs 919 crore, up from Rs 610 crore in Q4 FY25. The net loss for the quarter narrowed significantly by over 74 percent, falling to approximately Rs 69 crore from Rs 289 crore in the same period last year. As of March 31, 2026, the company's treasury stood at Rs 5,027 crore.
Analyst Outlook
The revised strategy and recent financial performance have garnered positive attention from institutional investors. In May 2026, HSBC initiated coverage on Physicswallah with a BUY rating and a price target of INR 135, citing strong demand for academic credentials across India as a structural growth driver. JP Morgan also initiated coverage with an Overweight target and a price target of Rs 125 in April 2026, further signaling market confidence in the company's long-term prospects.