Exclusive: PhysicsWallah in Discussions to Acquire Drishti IAS for ₹2,500 Crore

PhysicsWallah, the edtech unicorn, is in the final stages of acquiring Drishti IAS, a well-established offline coaching institute, for an estimated Rs 2,500-3,000 crore. If completed, this deal would be one of the largest acquisitions in the edtech sector in recent years.

Deal Details and Negotiations

Sources familiar with the matter indicate that PhysicsWallah has been negotiating with Drishti IAS since January 2024. The acquisition is expected to be finalized soon. The payment structure for the deal will be executed in multiple tranches, with disbursements linked to the company’s future performance milestones.

PhysicsWallah's IPO Plans

The acquisition news comes at a crucial time as PhysicsWallah is gearing up for its Initial Public Offering (IPO). The Noida-based edtech company recently appointed three independent directors and is looking to raise $500 million at a $5 billion valuation through the IPO.

Official Statements and Clarifications

Drishti IAS CEO Vivek Tiwari dismissed the acquisition reports, stating, “Although we have been meeting several people from different organisations (IPO Bankers, PEs & Edtech founders) for our future plans, nothing has been finalized so far. The information you are talking about is just a rumour which shouldn't be taken seriously at all.” Meanwhile, PhysicsWallah has yet to provide an official response.

About Drishti IAS

Drishti IAS is a 26-year-old educational platform specializing in offline coaching for the Civil Services Examination (CSE). The company reported Rs 405 crore in revenue and Rs 90 crore in profit after tax (PAT) in FY24. The Mukherjee Nagar center in Delhi remains its largest revenue generator, contributing 58% of total earnings, followed by branches in Prayagraj, Jaipur, and Karol Bagh.

PhysicsWallah's Growth and Expansion

Founded in 2015, PhysicsWallah has evolved into a comprehensive edtech platform, offering live and recorded lectures, test series, study materials, and hybrid offline coaching centers. The company has raised over $300 million in funding and was valued at approximately $2.8 billion in a $210 million Series B round in September 2023.

Financial Performance of PhysicsWallah

PhysicsWallah’s revenue surged to Rs 1,940.4 crore in FY24, a significant jump from Rs 744.3 crore in FY23. However, rising operational expenses led to an increase in losses, which expanded 13-fold to Rs 1,131 crore in FY24, compared to Rs 84 crore in FY23.

Strategic Shift Toward Offline Coaching

PhysicsWallah has been actively expanding its offline presence, aiming to generate over Rs 1,000 crore in offline revenue by the end of FY25. The potential acquisition of Drishti IAS aligns with this strategy, allowing PhysicsWallah to strengthen its foothold in the competitive UPSC coaching sector.

Market Impact and Industry Outlook

The proposed acquisition signals a shift in the edtech industry, with online learning platforms increasingly investing in offline education to provide a blended learning experience. If the deal goes through, it could set a precedent for further consolidation within the sector.

Conclusion

The potential acquisition of Drishti IAS by PhysicsWallah marks a significant development in the Indian edtech and offline coaching sector. If finalized, this deal will not only expand PhysicsWallah’s footprint in the UPSC and state-level exam preparation market but also strengthen its presence in the offline coaching space. With Drishti IAS’s strong reputation and PhysicsWallah’s digital-first approach, the acquisition could create a powerful hybrid learning model, offering students the best of both offline and online education.

Furthermore, as PhysicsWallah prepares for its IPO, this move aligns with its long-term growth strategy to diversify revenue streams and cement its position as a leading player in India’s competitive edtech landscape. However, with reports of rising operational costs and increasing losses, the company must ensure a strategic integration of Drishti IAS to make the most of this high-value acquisition. As the edtech industry continues to evolve, PhysicsWallah’s expansion into UPSC coaching could be a game-changer, setting new benchmarks in the sector.