PhysicsWallah shifts to NBFC loans, shares jump 17% in 2026

What PhysicsWallah announced

PhysicsWallah said it will exit the business of directly financing students and will instead enable education loans through partnerships with regulated third-party non-banking financial companies (NBFCs). The edtech company disclosed that it has tied up with multiple leading NBFCs for student lending needs. It said the move is part of a restructuring of its lending strategy. The company added that this decision reverses its earlier approach to on-book lending. PhysicsWallah also said the objective is to materially reduce balance sheet exposure and credit-related risks.

Why the move matters for risk and capital allocation

Moving away from lending from its own balance sheet reduces direct credit risk, including the risk of defaults and collections challenges. It also reduces the need to allocate more capital to grow a loan book. In its filing, the company positioned the new approach as an asset-light facilitation model, where regulated lenders handle underwriting and credit decisions. PhysicsWallah said it will focus on enabling access and affordability while leaving lending to entities built for credit assessment and risk management. The company linked the change to “prudent capital allocation” and “shareholder value” as priorities.

The ₹120 crore infusion into FinZ Finance and the quick reversal

The strategy change comes soon after PhysicsWallah announced an investment of ₹120 crore (₹1.20 billion) via equity infusion into its wholly owned subsidiary, FinZ Finance Private Limited. That announcement had indicated plans to deepen its presence in education financing through its finance unit. Within about a week, the company moved to abandon the on-book lending strategy. PhysicsWallah said the future strategic direction for FinZ Finance will be decided in the near future, subject to board and other regulatory approvals. Separately, people familiar with the matter said the company is exploring options such as a potential sale, a transfer of its loan book, and surrender of lending-related licences after abandoning the plan to lend from its own balance sheet.

What the company and co-founder said

In its disclosure, PhysicsWallah said feedback from partners indicated its core strength lies in building communities and its online business. It also said the lending business is better handled by regulated NBFCs with robust underwriting capabilities. Co-founder Prateek Maheshwari said the company revisited the earlier decision after feedback and described the move as part of its fiduciary responsibility. The filing reiterated that PhysicsWallah will continue to enable affordability and accessibility for students, but through regulated partners rather than directly.

How the NBFC partnership model will work

PhysicsWallah said it will operate as a technology platform connecting its students to a curated list of regulated lending partners. The matchmaking will be based on a student’s learning lifecycle and academic outcome journey, according to the filing. This structure keeps the lending function with licensed lenders while PhysicsWallah focuses on the distribution layer and the student experience. The company said the model is designed to be more scalable, robust, and capable of deeper penetration into the student ecosystem.

Stock market reaction: shares jump up to 17%

The strategic shift triggered a sharp market reaction. Reuters reported that shares surged as much as 17% after the company scrapped plans to lend directly and instead opted for NBFC partnerships. Another market update said the stock was up about 15% around 2 pm, trading near ₹105 per share after rising about ₹14. It also stated that the day’s move saw gains of up to 17-18% at the peak. The same update pegged the company’s market capitalisation at ₹30,893.58 crore and noted the stock had fallen about 6% over the past week and about 2% over the past month before the jump.

FinZ Finance: what is known from filings

PhysicsWallah previously disclosed that its audit committee approved investing about ₹120 crore into FinZ Finance through a rights issue. The company said it would subscribe to up to 2.67 crore fully paid-up equity shares of FinZ with a face value of ₹10 each, issued at a premium of ₹35 per share. FinZ is a wholly owned subsidiary operating in financial services and holds an RBI NBFC licence. The subsidiary received the licence in September 2025 and commenced operations in March 2026. FinZ was incorporated in July 2024 and is engaged in leasing, hire purchase, and financing activities. It reported a turnover of ₹0.001 crore in FY26.

Earlier disclosures on loan performance and customer mix

In an earlier post-results analysts call, PhysicsWallah’s management said it provides short-duration education loans, typically for less than one year. It also said that around 70-75% of loans were given to students already enrolled on the platform. Another disclosure said that over the past two years, PhysicsWallah disbursed education loans of over ₹200 crore, while keeping NPAs below 1%. The same commentary said around 70% of these loans were extended to PhysicsWallah students, with the remaining 30% going to external learners. These details explain why the company had explored bringing lending in-house, before switching back to a partner-led model.

Key facts at a glance

Analysis: what changes for investors and the business model

The announcement signals a clear preference for an asset-light structure in student lending. By routing loans through regulated NBFCs, PhysicsWallah reduces the direct impact of credit costs and provisioning on its own financials. It also reduces the operational burden of underwriting and collections that comes with on-book lending. At the same time, the company retains a role as a distribution and technology platform that can influence student conversion and affordability outcomes. The unresolved question is the future of FinZ Finance, which the company said will be decided later, subject to approvals, and which people familiar with the matter said could involve a sale, loan-book transfer, or licence surrender.

Conclusion

PhysicsWallah has shifted from an on-book student lending plan to an NBFC partnership model, framing the move as a step to cut balance sheet and credit risks. The company has said the strategic direction for FinZ Finance will be decided in the near future after board and regulatory approvals, while it continues connecting students with regulated lending partners.