PhysicsWallah To Sell ₹96 Cr Loan Portfolio To Auxilo Amid Lending Retreat

Edtech major PhysicsWallah’s wholly owned subsidiary FinZ Finance has agreed to sell a ₹95.79 Cr loan portfolio to Auxilo Finserve, taking forward the company’s retreat from direct student lending announced four months ago.

FinZ signed the deed of assignment on Saturday (October 3), with the transition of the loans and associated borrowers expected to conclude within 60 days, PhysicsWallah said in an exchange filing yesterday. 

The portfolio represents a substantial portion of FinZ’s loan book. The filing also pegged the consideration for the transaction at ₹95.79 Cr.

“As the principal business activity of FinZ Finance is lending, the proposed transaction constitutes a substantial reduction in its lending operations and is expected to result in partial/piecemeal closure of its lending operations,” the company said.

PhysicsWallah said the sale forms part of a broader strategic realignment to optimise capital allocation and focus on its core business. Lending would instead be facilitated through established, regulated third-party NBFCs to reduce balance sheet exposure and credit risks.

Founded in 2017, Mumbai-based Auxilo Finserve is an RBI-registered NBFC that provides education loans and financing to students and other stakeholders in the education sector.

Unwinding The Lending Push

The transaction follows PhysicsWallah’s decision in June to reverse its direct student lending strategy, shortly after approving a ₹120 Cr capital infusion into FinZ Finance in May.

The proposed investment put pressure on the company’s shares and raised concerns about its capital allocation priorities. Announcing the reversal, cofounder Prateek Maheshwari said feedback from partners indicated that the company should focus on its education business and leave lending to NBFCs with established underwriting capabilities.

Under the revised model, the edtech company would operate as a technology platform connecting students with lending partners, with financing tailored to their learning lifecycle and academic progress. It said this would improve affordability and accessibility while making financing more scalable and better integrated into its student ecosystem.

At the time, PhysicsWallah said FinZ’s future strategic direction would be decided subsequently, subject to board and regulatory approvals.

FinZ commenced business operations in February 2026, according to the latest filing. It reported negligible operating revenue and ₹1.35 Cr in other income in FY26, taking its total income to ₹1.35 Cr, or 0.04% of PhysicsWallah’s total income. Its net worth stood at ₹60.3 Cr as of March 31, representing 1.18% of PhysicsWallah’s net worth.

As Inc42 previously reported, PhysicsWallah’s lending push raised questions about the potential conflict between driving student enrolments and maintaining lending discipline when the same group controls both education and financing.

The concerns also reflected the sector’s experience with BYJU’S, whose use of third-party loans to finance courses drew allegations of mis-selling and coercive recovery practices.

Meanwhile, PhysicsWallah’s operating revenue rose 24.4% to ₹1,054 Cr in Q1 FY27 from ₹847.1 Cr in the year-ago quarter. Its net loss narrowed 30.5% to ₹88.3 Cr from ₹127 Cr in Q1 FY26. However, the loss widened 27.8% from ₹69.1 Cr in the preceding quarter.

Shares of PhysicsWallah were trading 6.12% higher at ₹127.50 on the BSE at 13:42 IST.

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