PhysicsWallah, an edtech company, is set to invest ₹120 crore in its wholly-owned fintech subsidiary, FinZ Finance. This strategic move aims to bolster the operations of FinZ Finance, which was granted a non-banking financial company (NBFC) license by the Reserve Bank of India in September 2022.
The investment involves subscribing to 26.7 million fully paid-up equity shares, each with a face value of ₹10 and a premium of ₹35. This decision was sanctioned by the company's audit committee earlier this week.
Details of the Investment
- Share Subscription: 26.7 million shares at ₹10 face value and ₹35 premium.
- Approval: Granted by the audit committee.
- Impact on Ownership: PhysicsWallah's shareholding in FinZ Finance will remain unchanged.
Operations of FinZ Finance
FinZ Finance operates in various sectors, including leasing, hire purchase, and financing services. The company plans to expand its offerings to include financing activities for consumers, individuals, and corporates. However, it reported negligible revenue for FY25 and FY26.
Context of the Investment
This capital infusion reflects PhysicsWallah's ambition to enhance its lending capabilities. Traditionally, edtech companies either collaborate with lenders or develop their own lending platforms to assist students in financing course-related expenses.
Recent Financial Performance
PhysicsWallah is expected to report its earnings for the March quarter soon. In the previous quarter, the company saw a 34% year-on-year increase in operating revenues, amounting to ₹1,082.4 crore. Its revenue for the first nine months of FY26 has already surpassed the total sales for FY25, with net profit rising to ₹102 crore.
Conclusion
This investment in FinZ Finance signifies PhysicsWallah's commitment to expanding its financial services, potentially enhancing its offerings to students and educational institutions.
