PhysicsWallah retreats from direct student lending as FinZ loan book heads to Auxilo
PhysicsWallah’s sale of Rs 95.79 crore of loans marks a rethink of its May push to scale FinZ, with the company shifting to third-party lenders amid questions over capital allocation, credit risk and strategic focus.
Edtech company PhysicsWallah (PW) has taken steps to reduce its involvement in direct student lending, with its subsidiary FinZ Finance selling a Rs 95.79 crore loan portfolio to Auxilo Finserve, an RBI-registered NBFC specializing in education finance. The sale is expected to lead to the partial closure of FinZ's lending operations, with the transition of loans and borrowers to be completed within 60 days.
This move comes as part of a broader strategic realignment aimed at focusing on PW's core business, optimizing capital allocation, and reducing balance-sheet and credit risks. Instead of lending directly through FinZ, PW will now facilitate lending through regulated third-party NBFCs. The decision to sell the loan portfolio was made after PW's Audit Committee approved an investment of approximately Rs 120 crore in FinZ for working capital and business expansion.
The move reflects a response to capital allocation and financial-risk concerns, as well as feedback from partners. By shifting to a more regulated lending model, PW hopes to address investor concerns and ensure the long-term sustainability of its edtech platform.
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