PhysicsWallah shares jump over 12% in two sessions; here’s why

Shares of PhysicsWallah rallied over 12% in two sessions after the edtech company announced that its wholly owned subsidiary, FinZ Finance, had entered into an agreement with Auxilo Finserve to sell a loan portfolio worth ₹95.79 crore.

Extending its gaining streak for the second session, Alakh Pandey-led PhysicsWallah shares jumped 3% to ₹135.40 on the BSE, after rallying over 9% in the previous session, taking its market capitalisation to around ₹38,000 crore.

The transaction, through which FinZ Finance will transfer a substantial portion of its loan portfolio to Auxilo Finserve, is part of PhysicsWallah’s broader strategy to restructure its lending business and focus on its core education operations.

PhysicsWallah sells ₹95.79 crore loan portfolio

The deed of assignment was entered into by FinZ Finance on October 3, 2026. Auxilo Finserve, an RBI-registered non-banking financial company (NBFC) focused primarily on the education sector, will acquire the loan portfolio for ₹95.79 crore.

PhysicsWallah said the transaction constitutes a substantial reduction in FinZ Finance’s lending operations and is expected to result in the partial closure of its lending business.

“The closure of substantial/major part of the total loan portfolio of FinZ Finance forms part of a broader strategic realignment, with a view to focusing on the company’s core business operations and optimising capital allocation,” the company said in a regulatory filing.

“As the principal business activity of FinZ Finance is lending, the proposed transaction constitutes a substantial reduction in its lending operations and is expected to result in partial/piecemeal closure of its lending operations,” it added.

The company said lending activities will instead be facilitated through established and regulated third-party NBFCs, allowing it to improve operational efficiency while reducing balance-sheet and credit risks.

Company shifts to asset-light lending model

In June, PhysicsWallah, co-founded by Alakh Pandey and Prateek Maheshwari, said it would move away from lending on its own balance sheet and partner with multiple regulated third-party NBFCs to meet students’ financing needs.

Under the revised model, the Noida-based company will operate as a technology platform connecting students with a curated network of lending partners based on their learning lifecycle and academic outcomes.

The move marks a shift from its earlier strategy of originating loans through FinZ Finance, which received its RBI NBFC licence in September 2025 and commenced operations in March 2026.

PhysicsWallah had recently announced an equity infusion of around ₹120 crore into FinZ Finance, which was set up to provide short-term academic loans to students.

However, management has now opted for an asset-light approach, with Maheshwari saying the company’s core strength lies in building communities and its online education business.

“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, which have developed robust underwriting capabilities,” Maheshwari said in a recent interview with Fortune India.

He had also said the company would remain cautious about capital allocation in the lending business, with the primary objective being to improve educational inclusion for lower-middle-class and underprivileged students rather than build a large lending franchise.

“There will not be any meaningful capital allocation in this vertical. The objective is to improve inclusion in mainstream education for lower-middle-class and underprivileged students,” he had said.

By partnering with established NBFCs instead of lending directly, PhysicsWallah aims to continue improving access to education financing while reducing its capital requirements and exposure to credit risk. The shift also allows the company to focus resources on its core education business.