Physicswallah sets Rs 2.56 lakh Utkarsh tranche, drops fifth

Physicswallah Limited will pay Rs 2.56 lakh in cash for a 12.25% stake in Utkarsh Classes & Edutech Private Limited, taking its holding from 75.50% to 87.75%, after its board replaced a profit-after-tax-linked fourth-tranche valuation and removed the planned fifth tranche on November 4, 2026.

What did Physicswallah approve for Utkarsh Classes?

Physicswallah approved a third amendment to the Share Acquisition Terms Agreement, or SATA, that fixes the Tranche IV consideration and dispenses with Tranche V. Its board considered and approved the amendment and the fourth-tranche acquisition on November 4, 2026, at a meeting that began at 2:45 p.m. Indian Standard Time and ended at 3:37 p.m.

The SATA was signed on February 18, 2023 and, before the amendment, provided for acquisition of up to 100% of Utkarsh Classes through five tranches by FY 2027-28. Physicswallah had completed the first three tranches and held 75.50% of Utkarsh Classes before the board-approved Tranche IV purchase.

The amendment replaces the Tranche IV mechanism linked to profit after tax, or PAT, with a mutually agreed fixed purchase consideration. It also deletes the provisions and valuation mechanism for Tranche V, changing the remaining route under the February 2023 agreement from two planned tranches to one approved 12.25% purchase.

How much will Physicswallah pay and what stake will it own?

Physicswallah will pay Rs 2.56 lakh in cash for 25,599 equity shares, representing 12.25% of Utkarsh Classes’ fully diluted equity share capital. The acquired shares have a face value of Rs 10 each, and Physicswallah intends to complete the purchase within three months of the November 4, 2026 disclosure.

The Tranche IV purchase will raise Physicswallah’s holding by 12.25 percentage points, from 75.50% to 87.75%. The filing says the shares are being acquired from existing shareholders and states that the transaction will leave 12.25% of Utkarsh Classes outside Physicswallah’s ownership after the approved purchase.

The consideration is cash, rather than a share swap or another form of payment. Physicswallah said no governmental or regulatory approvals are required for the 12.25% acquisition, which it described as an incremental purchase under the existing SATA.

Why did Physicswallah change the acquisition structure?

Physicswallah changed the acquisition structure by substituting a fixed Rs 2.56 lakh Tranche IV price for the earlier PAT-linked mechanism and by removing Tranche V. The November 4, 2026 filing does not disclose the previous PAT formula, a projected PAT figure or a calculated price under the old mechanism.

The disclosed comparison is therefore between the agreement structures, rather than between two calculated valuations. Before the amendment, the SATA contemplated up to 100% ownership in five tranches by FY 2027-28; after the amendment, Physicswallah has approved a fourth-tranche acquisition taking its holding to 87.75% and deleted the final tranche’s acquisition and valuation provisions.

Physicswallah said the fixed consideration was mutually agreed, but did not give a separate commercial rationale for the revised terms. The filing also does not disclose an enterprise value, equity valuation or valuation multiple for Utkarsh Classes, beyond the Rs 2.56 lakh cash consideration for 25,599 shares.

Is the Utkarsh Classes purchase related to Physicswallah’s business?

Yes, Physicswallah said the Tranche IV acquisition is consistent with its core education business and does not change its line of business. Utkarsh Classes operates in the education industry and was incorporated on November 16, 2018.

Utkarsh Classes establishes and operates educational institutions in India or abroad, including schools, colleges, coaching centres, laboratories and workshops across science and non-science streams. It also provides educational content and sells books and course materials through online platforms, while its disclosed country of presence is India.

Physicswallah stated that the transaction does not fall within the ambit of a related-party transaction. It further said its promoter, promoter group and group companies have no interest in Utkarsh Classes, while the 25,599 shares are being acquired from existing shareholders.

How has Utkarsh Classes’ turnover changed?

Utkarsh Classes reported turnover of Rs 169.66 crore in FY 2025-26, up Rs 0.70 crore from Rs 168.96 crore in FY 2024-25. The latest reported turnover was also Rs 22.69 crore above the Rs 146.97 crore recorded in FY 2023-24.

The three-year comparison shows that turnover increased by Rs 21.99 crore between FY 2023-24 and FY 2024-25, then rose by Rs 0.70 crore in FY 2025-26. Physicswallah’s filing gives turnover figures for these financial years but does not provide segment profit, PAT or margin data for Utkarsh Classes.

Utkarsh Classes has paid-up share capital of Rs 20.90 lakh, according to the acquisition disclosure. That figure is separate from the Rs 2.56 lakh cash consideration for Tranche IV and from the Rs 169.66 crore turnover reported for FY 2025-26.

When will Physicswallah complete the Utkarsh Classes purchase?

Physicswallah intends to complete the 12.25% acquisition within three months of the November 4, 2026 announcement. The filing does not provide a specific closing date within that period or identify a regulatory approval condition.

The next disclosed transaction milestone is completion of the 25,599-share Tranche IV purchase, following the third SATA amendment. The amendment removes the contractual Tranche V acquisition and valuation mechanism, and Physicswallah did not disclose a replacement plan for the remaining 12.25% interest.

Conclusion

Physicswallah has changed the acquisition path set out in its February 2023 SATA with Utkarsh Classes. The fourth-tranche price is now a fixed Rs 2.56 lakh cash payment rather than a PAT-linked valuation, and eliminating Tranche V means the approved purchase takes ownership to 87.75%, not the previously contemplated route to up to 100% by FY 2027-28.

The immediate item to watch is completion of the 25,599-share Tranche IV purchase within the disclosed three-month period. Investors can also watch for any later disclosure on the residual 12.25% stake, because the November 4, 2026 announcement removes the fifth-tranche mechanism without setting out another acquisition plan.