What levers must Physics Wallah pull to crack the South?
But the red herring prospectus (RHP) for the company’s ₹3,480 crore initial public offering (IPO) showed that in the first quarter of fiscal year 2026 (FY26), Kozhikode fell to third place, going down from about 10.5% of total offline revenue to around 6%, having been overtaken by Delhi National Capital Region and Patna. Revenue from the city dropped to ₹24 crore in the three months ended June 2025 from ₹34 crore a year earlier, falling nearly 30%. The IPO offer documents attribute this decline to PW scaling back hostel operations for “strategic reasons.”
Kozhikode was meant to be PW’s anchor in the South, which generally sees a more structured, often integrated, test-prep model. Instead, its performance has been a loud reminder: if India were one market, biryani recipes and coaching habits would look the same everywhere. But they don’t.
PW is looking to build momentum beyond the North, its stronghold. Flush with funding from its IPO (the company will get listed on Tuesday), it is hoping to build the mass and velocity needed for that. The IPO, with a ₹3,100 crore fresh issue, got a lukewarm response but made it past the finish line thanks to demand from qualified institutional buyers.
Born on YouTube
Physics Wallah was shaped in the North—its very name, anchored in everyday Hindi, hints at the audience it first spoke to. Incorporated in 2020 by YouTube educator Alakh Pandey, it became a household name across the Hindi-speaking heartland by blending affordable courses, star teachers and a deeply relatable founder persona.
Popularly known as ‘Alakh sir’ among his student base, Pandey’s journey began long before the company itself. He launched the Physics Wallah YouTube channel in 2014, posting videos after his shifts at a coaching centre.
Growth was slow at first. The real momentum came only in 2017, when he quit his teaching job to focus entirely on YouTube. By 2019, the channel had crossed 2 million subscribers—built largely on word-of-mouth and his distinctive teaching style.
When the pandemic pushed both teaching and learning online, demand for his content surged. Thereafter Pandey partnered with Prateek Maheshwari, an Indian Institute of Technology (IIT) graduate and serial entrepreneur who had founded ventures such as Moon2Noon, Caterpillar Inc., NightPanda and PenPencil, and launched the Physics Wallah app.
“PW breaks the ‘richness–reach’ compromise by delivering the same high-quality education to both the poorest and the richest students in India.” —Sandeep Singhal, co-founder and managing partner of WestBridge Capital.
The bootstrapped company introduced coaching for the masses at a price point as low as about ₹1,000. That move hit its competitors in the North hard. To this day, PW continues to offer low-cost online courses at a price point of ₹3,000-4,000.
Impressed by PW’s momentum, investors began lining up. Before going public, it had raised over $300 million from various marquee investors, including Hornbill Capital, WestBridge Capital, Lightspeed Venture Partners and GSV Ventures, turning into a multi-billion-dollar company. “PW breaks the ‘richness–reach’ compromise by delivering the same high-quality education to both the poorest and the richest students in India,” Sandeep Singhal, co-founder and managing partner of WestBridge Capital, told Mint.
PW is now gearing up to invade the South. The offer document for the company’s IPO laid out its plans to expand its offline presence, with an attempt to crack the southern market. In India’s Down Under, it will have to contend with a number of rivals, including established names such as Sri Chaitanya, Narayana Group and even Allen Career Institute, a northern stalwart that headed South in 2014.
In an interview with Mint ahead of PW’s listing, Pandey said the company has less than 5% penetration in the southern test-prep market both online and offline, but the region remains a major part of its growth aspirations. The question now is: does Pandey have what it takes to pass with flying colours beyond the Hindi belt?
Kerala: The gateway
PW, which primarily focuses on online learning, made a serious push into the southern region—a market where it previously had virtually no offline presence and only a thin online presence—in 2023 through Xylem.
Xylem already had deep regional trust—it had over 3 million students on its YouTube channels, more than 100,00 paid online learners and 30,000 students across its hybrid centres in five major districts in Kerala. It also ran 10 tuition centres and school-integrated programmes across seven schools, giving it a strong offline footprint that PW lacks in the region.
By June 2025, PW was running 28 Xylem-branded offline centres, mostly in Kerala, according to the RHP. The company has now opened its first centre in Tamil Nadu, again under the Xylem banner.
PW now plans to widen this footprint but with caution—the company plans to open at least 13 new Xylem centres, the RHP said. To support this expansion, PW has earmarked close to ₹31.6 crore from its IPO proceeds for the fit-out of new Xylem centres. Overall, its aggressive offline expansion plans include opening about 95 new Vidyapeeth centres, 30 Pathshala hubs and 107 additional offline centres over the next three years, funded partly through around ₹460 crore from the IPO.
The southern push is only one part of PW’s broader plan to become India’s number one test-prep brand. Pandey said the company aims to dominate state board exams, grow new exam categories launched last year, lead the 45% of segments where it still trails rivals, deepen its early-grade footprint and expand offline aggressively.
All this is playing out at a time when the test-prep market is growing rapidly. Estimates cited in the RHP show the industry is expected to approach ₹2 trillion by FY30, driven by steady demand for Joint Entrance Examination (JEE) and National Eligibility cum Entrance Test (NEET) coaching.
A large share of this demand originates in the southern states, which have some of the most competitive test-prep hubs in the country. Sri Chaitanya and the Narayana Group, two of the biggest incumbents in the South, together generate nearly ₹10,000 crore in annual revenue, underscoring the size of the market PW is targeting.
In FY25, PW’s operating revenue rose 49% to roughly ₹2,887 crore, up from ₹1,941 crore in FY24. The company’s net loss narrowed sharply to around ₹243 crore that fiscal year, an almost 80% reduction from ₹1,131 crore in FY24, partly due to one-off accounting charges.
Post the IPO, the edtech company is now well-capitalized to target the southern market, even through inorganic investments. However, Pandey emphasizes that these are not markets one can win with capital alone. “If money could fill them (white spaces), the $10 billion that other tech companies raised would have filled them. This business must be built out of student love and trust,” he said.
The founder added that the model itself is not capital-heavy, and that scale depends on results. “Education is an outcome-driven business. If you add value, students bring other students. Word of mouth drives growth. You don’t need huge marketing budgets.”
Playbook limitations
But PW’s performance hasn’t been outstanding. The company’s RHP discloses only two concrete performance metrics: 23 students securing ranks within the top 1,000 in JEE Advanced 2023, and nine students scoring above 700 in NEET 2023. According to a report by rival Vedantu, the highest NEET score in 2023 was 720, and the average score of male aspirants was 590, while female aspirants scored 620. Oddly, the RHP does not reveal how PW performed in 2024 or 2025.
This tepid performance, given PW’s reach, encompassing over 4 million paid students across segments and channels, puts a huge question mark over the effectiveness of its coaching. Experts in the industry argue that its approach resonates more with first-time or less serious aspirants, leading to fewer ranks in top competitive exams such as JEE and NEET.
PWs tepid performance, given its reach, encompassing over 4 million paid students across segments and channels, puts a huge question mark over the effectiveness of its coaching.
When benchmarked against peer claims, the gap becomes even more apparent. Narayana, for instance, accounted for four of the top 10 all-India ranks in NEET UG 2023 and three of the top 10, 25 of the top 100, and 160 of the top 1,000 all-India ranks in IIT-JEE 2023.
Sri Chaitanya posted similarly dominant results: 29 of the top 100 ranks in JEE Main 2023, including All India Rank 1 (AIR 1), and 16 ranks in the top 100 in NEET 2023, again featuring AIR 1.
The operating model in the South is fundamentally different. Andhra Pradesh, Telangana, Tamil Nadu and Karnataka run tightly structured systems built around integrated school programmes and hostels that manage a student’s entire day.
At the core is the Integrated School-Coaching Model, which merges school academics (CBSE/State Board) and competitive exam preparation (JEE/NEET) within a single campus. By eliminating the daily commute between school and coaching, the system channels every hour into one high-intensity learning schedule. Originating in Andhra Pradesh and Telangana, the model typically runs from 5 AM to 10 PM, combining classes, supervised self-study and weekly tests.
Among the most prominent integrated schools in the South are Shri Chaitanya Academy, Narayana Educational Institutions, Apollo Academy, and Alpha Genius Integrated School. Newer entrants Aakash, Allen and FIITJEE have also offered integrated models in the South.
The scale of these institutions reflects how entrenched this format is. The Narayana Group, for instance, operates 295 junior colleges, 454 schools and 17 other institutes, and had 112 coaching centres with 26,077 enrolled students as of March 2025, according to an August report by India Ratings and Research. In such a system, tightly integrated campuses and full-day supervision leave little space for the hybrid, low-infrastructure models that work in cities such as Patna or Lucknow.
Nitin Bhatia, managing director of DC Advisory, an international investment bank, said, “In the South, price points are lower relative to the integrated service provided. There is a strong track record. In many places, it’s a very focused residential model—students stay in a hostel, attend school, then go to their coaching classes in the same setup. That integrated model is highly successful in that part of the country.”
This is in sharp contrast with North India, where test-prep has historically followed two flexible formats: the legally grey “dummy school” system—where students are formally enrolled in a school but skip most classes to focus on coaching (as in Kota), and the day-school plus evening or weekend coaching arrangement. Both formats let students mix and match courses from multiple institutes.
Moreover, South India isn’t a homogeneous market and one size will not fit all. It is four distinct markets shaped by different academic priorities. Andhra Pradesh is intensely outcome-driven and engineering-focused; Kerala is hyper-local with strong integrated models such as Xylem; Karnataka leans on professional, rigour-aware parents; and Tamil Nadu is predominantly a NEET market shaped by local politics. But all four have one thing in common: outcomes decide if a coaching centre can break in, as Allen Career Institute can testify.
Allen, which entered in 2014, saw real adoption only after generating real results—that took over five years. “Success in Kota was one thing, but nobody knew Allen’s name in the South. When the company was looking for office space eight years back, people thought they were Allen Solly,” said a person aware of the company’s operations.
In terms of outcomes, in 2024, five of the top 100 ranks were from Bengaluru for Allen. Outside of that, over 200 IITians qualified from Allen’s Bengaluru centre. These results have driven up its enrolment in the city.
For PW, the challenge is not simply entering the South, but adapting to an ecosystem where digital reach, hybrid formats and low pricing—the pillars of its northern success—have far less leverage. But founder Maheshwari told Mint that Physics Wallah would not follow a different strategy in the South. “Our playbook stays consistent with the model we’ve used successfully in the North. Our southern expansion will be driven primarily by online penetration, while offline remains a more staggered goal,” said Maheshwari. “As soon as we start winning online, we move offline.”
PW’s paid online penetration data shows a clear split between its mature and emerging markets. Bihar (37.9%), Uttar Pradesh (33.7%), West Bengal (25%) and Madhya Pradesh (23.9%) sit in the high-penetration bracket, reflecting PW’s early dominance. In contrast, the southern states show much lower paid penetration: Karnataka is at 8.8%, Telangana at 6.6%, Andhra Pradesh at 2.7%, Tamil Nadu at 1.1%, and Kerala at just 0.7%.
Maheshwari argues that this gap is not a weakness but an opportunity. PW’s 25% penetration in West Bengal is proof that it can successfully win regional-language markets, even without Hindi as the base, he added.
Nevertheless, for PW, the next phase will hinge on whether its aggressive offline expansion and deeper push into the South can deliver scale and credibility. How effectively the edtech company adapts its North-tested model to this structurally different market will determine if it can realize its ambition of becoming a national education brand.
