PhysicsWallah Share Price Surges 15% To Become Top Gainer; Here's What Drove The Rally

On Thursday, Indian equity benchmarks ended on a positive note, while PhysicsWallah share price surged nearly 15 per cent after the company announced a strategic change in its student financing business. The stock rallied after the edtech company decided to step back from its plan to lend directly to students through its wholly owned subsidiary, FinZ Finance, and instead return to a co-lending model with established non-Banking financial companies (NBFCs).

PhysicsWallah Steps Back From Direct Lending Model

The development comes just days after PhysicsWallah had announced plans to strengthen FinZ Finance, its RBI-licensed NBFC subsidiary.

On May 27, 2026, the company's audit committee approved an investment of Rs 120 crore into FinZ Finance through a rights issue. The capital infusion was intended to support working capital requirements and expand the subsidiary's student lending operations.

FinZ Finance had obtained its NBFC licence from the Reserve Bank of India in September 2025 and commenced lending operations in March 2026, marking PhysicsWallah's entry into direct education financing.

Direct Lending Proposal Drew Market Attention

The proposed shift to direct lending raised concerns among investors regarding the company's exposure to credit risk.

Under the co-lending model used previously, student loan exposure was shared with partner NBFCs. However, a direct lending structure would have placed the entire credit risk on PhysicsWallah's balance sheet through FinZ Finance.

The move prompted questions around loan recovery, borrower defaults, risk management practices and the long-term impact on the company's financial position. Investors also drew comparisons with challenges previously witnessed in the edtech sector where student financing practices came under scrutiny.

Back To The Co-Lending Model

On June 4, 2026, PhysicsWallah confirmed that it would return to its earlier partnership-based financing approach.

Under the revised strategy, student financing will continue through collaborations with external NBFCs, ensuring that credit exposure remains shared rather than concentrated on the company's own books.

The announcement was viewed positively by investors, with the stock witnessing a sharp rally as concerns regarding balance sheet risk eased.

The company, however, has retained FinZ Finance and its NBFC licence, indicating that the infrastructure remains in place should it choose to revisit direct lending opportunities in the future.

Existing Student Financing Track Record

Prior to launching FinZ Finance's lending operations, PhysicsWallah had already established a student financing ecosystem through NBFC partnerships.

Over the past two years, the company facilitated education loans exceeding Rs 200 crore through external lending partners. Approximately 70 per cent of these loans were extended to existing PhysicsWallah students, while the remaining 30 per cent were provided to learners outside its platform.

About PhysicsWallah 

PhysicsWallah is an education technology company offering preparation courses for competitive examinations including JEE, NEET and UPSC, along with upskilling programmes across data science, finance, banking and software development.

Founded by Alakh Pandey and Prateek Boob, the company operates through a combination of online learning platforms and offline centres across India. PhysicsWallah became the first major edtech company to list on Indian stock exchanges when it completed its Rs 3,480 crore IPO in November 2025.

What are your thoughts on PhysicsWallah's decision to return to the co-lending model? Share your views in the comments below.
Disclaimer: The article is for informational purposes only and not investment advice.