PhysicsWallah, the edtech unicorn based in Noida, has filed draft IPO papers with the Securities and Exchange Board of India (Sebi) through a confidential pre-filing route. This route enables the company to withhold public disclosure of details in the draft red herring prospectus (DRHP).
What’s confidential filing
PhysicsWallah announced on Wednesday that it has “filed pre-DRHP with Sebi and the stock exchanges under ICDR Regulations about the proposed initial public offering of its equity shares on the mainboard of the stock exchanges.” However, the company clarified that this pre-filing does not guarantee it will proceed with the IPO.
A brief history of PhysicsWallah
Founded in 2020, PhysicsWallah has become known for providing accessible and comprehensive learning experiences to students across online, offline, and hybrid modes, reaching 98 percent of Indian pin codes.
In September, the company raised USD 210 million in a funding round led by Hornbill Capital, valued at USD 2.8 billion, 2.5 times higher than before.
Other companies using the confidential route
PhysicsWallah is among a few companies that have chosen the confidential filing route for their IPOs. Last year, Swiggy and Vishal Mega Mart successfully floated their initial share sales after making confidential filings. In 2023, OYO took the same route but did not proceed with the share sale.
Tata Play, formerly known as Tata Sky, was the first company in India to use this option in December 2022. It received the regulator’s observation letter in April 2023, although it did not proceed with the public issue.
Advantages of the pre-filing route
Experts note that the pre-filing route relieves the company from the pressure to go for an IPO immediately. Unlike the traditional route, where companies must launch the IPO within 12 months of Sebi’s approval, the pre-filing route allows for an IPO to be floated within 18 months of Sebi’s final comments. This route also provides flexibility in changing the primary issue size by up to 50 percent until the updated draft of the Red Herring Prospectus (UDRHP) stage.
