MUMBAI: Physics Wallah is weighing options to recover the ₹120 crore recently infused into its lending subsidiary FinZ Finance, including a potential sale, transfer of its loan book and surrender of lending-related licences, after deciding to scrap its on-book lending strategy, according to two people familiar with the matter.

The decision comes only a week after the edtech company announced the infusion, signalling plans to expand its presence in education financing. On Thursday, however, the company said it would abandon its on-book lending strategy and instead partner with regulated third-party non-banking financial companies (NBFCs) to offer student financing.

“The long term partners of the firm suggested the company to not diversify into this (lending) segment as they are doing well as an education business,” one of the people cited above said. “The company will now look at options to recoup the investments either through sale or letting go of the license and relying on capital reduction.”

The decision will follow a board review and regulatory approval, the person added.

In an exchange filing, Physics Wallah said it would no longer pursue lending on its own books and would instead operate as a technology platform connecting students with a curated set of regulated lending partners. The revised strategy would materially reduce balance-sheet and credit-related risks, the company said.

“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,” Prateek Maheshwari, co-founder of Physics Wallah, said in the filing.

The company also said that its strategic direction for FinZ Finance will be decided in the near future subject to the Board and other regulatory approvals, without sharing further details.

Queries sent to Physics Wallah did not elicit a response till press time.

Capital rethink

During its FY26 earnings call last week, the company said it would stop further capital allocation towards its ambitious K-12 schools expansion strategy after having already invested around ₹100 crore in the business. Management instead signalled a stronger focus on profitability and disciplined capital deployment.

The back-to-back pullbacks suggest Physics Wallah is becoming increasingly cautious about entering capital-intensive businesses after its public listing in November 2025, despite sitting on a treasury of nearly ₹5,000 crore.

Physics Wallah, which was founded as a YouTube channel in 2016 by Alakh Pandey and Prateek Maheshwari and incorporated as a company in 2020, launched offline education in 2022 after online education slowed down along with others in the segment. The company now offers education to students through its native app, tech-enabled offline and hybrid centres, as well as YouTube channels.

This comes after the company had disclosed that loan disbursements under its financing initiatives crossed ₹200 crore, with management saying non-performing assets remain below 1%.

The moderation in ambitions comes even as Physics Wallah reported strong FY26 growth despite a challenging environment for the broader edtech sector.

Revenue from operations rose 35% year-on-year (y-o-y) to ₹3,900 crore. The company reported profit before tax of ₹10 crore compared to a loss of ₹259 crore in FY25, while Ebitda rose 184% y-o-y to ₹549 crore.

In the fourth quarter, revenue rose 50% y-o-y to ₹919 crore and losses narrowed to ₹69 crore from ₹289 crore in the year-ago period.

MUMBAI: Physics Wallah is weighing options to recover the ₹120 crore recently infused into its lending subsidiary FinZ Finance, including a potential sale, transfer of its loan book and surrender of lending-related licences, after deciding to scrap its on-book lending strategy, according to two people familiar with the matter.

The decision comes only a week after the edtech company announced the infusion, signalling plans to expand its presence in education financing. On Thursday, however, the company said it would abandon its on-book lending strategy and instead partner with regulated third-party non-banking financial companies (NBFCs) to offer student financing.

“The long term partners of the firm suggested the company to not diversify into this (lending) segment as they are doing well as an education business,” one of the people cited above said. “The company will now look at options to recoup the investments either through sale or letting go of the license and relying on capital reduction.”

The decision will follow a board review and regulatory approval, the person added.

In an exchange filing, Physics Wallah said it would no longer pursue lending on its own books and would instead operate as a technology platform connecting students with a curated set of regulated lending partners. The revised strategy would materially reduce balance-sheet and credit-related risks, the company said.

“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,” Prateek Maheshwari, co-founder of Physics Wallah, said in the filing.

The company also said that its strategic direction for FinZ Finance will be decided in the near future subject to the Board and other regulatory approvals, without sharing further details.

Queries sent to Physics Wallah did not elicit a response till press time.

Capital rethink

During its FY26 earnings call last week, the company said it would stop further capital allocation towards its ambitious K-12 schools expansion strategy after having already invested around ₹100 crore in the business. Management instead signalled a stronger focus on profitability and disciplined capital deployment.

The back-to-back pullbacks suggest Physics Wallah is becoming increasingly cautious about entering capital-intensive businesses after its public listing in November 2025, despite sitting on a treasury of nearly ₹5,000 crore.

Physics Wallah, which was founded as a YouTube channel in 2016 by Alakh Pandey and Prateek Maheshwari and incorporated as a company in 2020, launched offline education in 2022 after online education slowed down along with others in the segment. The company now offers education to students through its native app, tech-enabled offline and hybrid centres, as well as YouTube channels.

This comes after the company had disclosed that loan disbursements under its financing initiatives crossed ₹200 crore, with management saying non-performing assets remain below 1%.

The moderation in ambitions comes even as Physics Wallah reported strong FY26 growth despite a challenging environment for the broader edtech sector.

Revenue from operations rose 35% year-on-year (y-o-y) to ₹3,900 crore. The company reported profit before tax of ₹10 crore compared to a loss of ₹259 crore in FY25, while Ebitda rose 184% y-o-y to ₹549 crore.

In the fourth quarter, revenue rose 50% y-o-y to ₹919 crore and losses narrowed to ₹69 crore from ₹289 crore in the year-ago period.