The draft red herring prospectus (DRHP) filed by Edtech company Physicswallah, which looks to raise ₹3,820 crore via an initial public offering (IPO), has thrown up multiple concerns ranging from unsecured loans to subsidiaries to disgruntlement among students.
The company’s listing document mentions about loans worth ₹127 crore extended to subsidiaries including Xylem, PrepOnline, iNeuron and Knowledge Planet.
Further, the prospectus also reveals details about the subsidiaries that may be of serious concern for potential subscribers.
For instance, it says the subsidiary iNeuron “does not have any active business operations or employees as at the balance sheet date and is continuing only through its legacy course content,” adding that the company may also not go ahead functioning.
“iNeuron’s ability to meet its liabilities as and when they fall due within a period of one year from the balance sheet date is dependent on the realisation of receivables and other uncertain cash flows,” according to the DRHP.
‘Assets not disclosed’
Another subsidiary PenPencil has not disclosed its assets, the prospectus reveals. “Penpencil did not maintain a record with sufficient description or asset identification number of property, plant and equipment to make identification possible” and “have not been physically verified by Penpencil management during fiscal 2023,” the company disclosed.
The loan agreement to PenPencil also does not mention the schedule of repayment.
Beside monetary risks, there are other concerns.
The company had been under the scanner for incidents that had threatened the safety of students.
Although the requisite SOPs and measures had been taken to address such risks, there was no guarantee that there would be no such “accidents or safety breaches” the company said in its prospectus.
The company plans to raise ₹3,100 crore in fresh issue and ₹720 crore via offer for sale.
Published – September 09, 2025 10:53 pm IST
