PhysicsWallah shares surge 18% on partnership with NBFCs for student financing

Edtech platform PhysicsWallah Ltd's shares skyrocketed on Thursday, June 4, after the company announced that it partnered with multiple non-banking financial companies (NBFCs) for student financing.

The stock rose as much as 17.81% to ₹108.44 apiece on the National Stock Exchange (NSE). At 12:07 pm, it was up 16.25% to ₹107 per unit. The company's market capitalisation stands at ₹30,893.58 crore.

The scrip has declined 4.16% in the past week and 1.90% in a month. Year-to-date, it has slipped 19.08%.

Now, restructuring its lending strategy, the company, in an exchange filing on June 4, announced that it has tied up with several third-party NBFCs to enable student lending requirements.

This decision reverses the Noida-based firm's earlier approach and is likely to materially reduce the balance sheet and credit-related risks for the company.

The learning platform said that it will work as a technology platform that connects PhysicsWallah's students to a curated list of leading regulated lending partners.

The company said that the strategic direction for Finz Finance Pvt Ltd will be decided in the near future, subject to the approval of the Board of Directors and other regulatory conditions.

Prateek Maheshwari, co-founder of PhysicsWallah, "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."

"We truly believe that prudent capital allocation and shareholder value remains our foremost priority and in light of the feedback received from our partners to the said announcement, we have exercised our fiduciary responsibility to revisit this decision and enable student lending through regulated third-party NBFCs," he added.