When PhysicsWallah started in 2016 with Alakh Pandey’s whiteboard lessons on YouTube, the promise of edtech was scale without infrastructure. A smartphone, an Internet connection, and a good teacher — that was the pitch. Fast forward to 2025, the same company is raising money to build classrooms, hire landlords, and compete with traditional coaching centres. Somewhere along the way, the logic flipped: offline is now the big growth driver.
The company’s draft red herring prospectus (DRHP) shows how this transition is reshaping its economics. Lease rentals for its physical centres shot up 47% in FY25 to Rs 141 crore, while depreciation and amortisation expenses linked to these classrooms grew 22% to Rs 366.4 crore. From a handful of outlets a few years ago, PhysicsWallah today runs nearly 200 centres across 109 cities. Expansion has come not just from opening “Vidyapeeth” and “Pathshala” classrooms but also from a spree of acquisitions like Utkarsh Classes, iNeuron, Knowledge Planet, Xylem, and more, bringing local test prep brands under its umbrella.
All of this has meant steep upfront costs. Centres require marketing before the first student walks in, leases must be signed even if enrolments fall short, and regulatory hurdles vary from city to city. It’s an expensive gamble compared to the low-cost online origins of the business.
Economics of the offline shift
Yet, the numbers explain why PhysicsWallah is making this bet. In FY25, its offline business brought in Rs 1,351.9 crore, nearly as much as the Rs 1,404 crore earned from online courses. That parity is striking when you consider only 7% of PhysicsWallah’s 4.46 million students attend its offline classes.
The math tells the story. Offline average revenue per user (Arpu) stood at Rs 40,404 in FY25, more than ten times the Rs 3,682 Arpu online. Every offline student is, in effect, worth an entire cohort of online learners. That multiplier effect has allowed the offline segment to contribute nearly half the company’s revenues despite its smaller footprint.
This shift is not just about revenue but also about geography. The company’s DRHP highlights how offline centres help hedge against over-dependence on traditional hubs like Kota, where enrolments fell from 27,158 in FY23 to just 11,540 in FY25. By planting classrooms in cities like Muzaffarpur, Dhanbad, Latur, and Rajkot, PhysicsWallah hopes to capture demand where local players dominate but national brands are thin on the ground. The IPO proceeds will funnel Rs 460 crore into opening more such centres.
The payoff is visible in the topline. Overall revenue jumped 49% year-on-year to Rs 2,886.6 crore in FY25. Losses narrowed sharply, from over Rs 1,131 crore in FY24 to Rs 243.3 crore in FY25. For a company chasing public investors, that trajectory matters.
Navigating fixed costs and execution risks
But the risks are equally real. Unlike online, where scaling means adding servers and content, offline growth locks the company into fixed costs like leases, staff salaries, and local compliance. If enrolments slow in smaller cities, the economics can turn quickly. The company also acknowledges execution risks, like ensuring consistent quality of faculty across 200 centres is harder than streaming one star teacher to millions of screens
PhysicsWallah’s strategy, then, rests on a delicate balance. The online channel brings scale and reach, planting the brand in small towns and new markets. The offline channel monetises that demand more efficiently, pulling in higher-paying students willing to pay for physical classrooms, structured timetables, and doubt-clearing sessions.
The paradox is that an edtech born online is now betting its future offline. If the centres fill up and economies of scale kick in, PhysicsWallah could have a model where every city classroom pays back the heavy upfront costs many times over. But if enrolments stumble, the very physics of its business — fixed costs versus flexible revenues — will start working against it.
For now, though, the offline gamble has tilted the numbers in its favour. The classrooms are heavy, the rents are rising, but the students keep coming,and each one who signs up offline is worth ten online.