New Delhi, Jun 4 (PTI): Shares of edtech firm PhysicsWallah on Thursday jumped nearly 16 per cent after the company announced partnerships with multiple NBFCs as a part of restructuring of its student lending business.
It plans to exit the business of direct financing for students, according to a regulatory filing.
The decision is intended to materially reduce balance sheet and credit-related risks for the company, PhysicsWallah said.
The stock zoomed 15.64 per cent to settle at Rs 106.50 on the BSE. During the day, it surged 17.75 per cent to Rs 108.45.
At the NSE, the stock soared 15.66 per cent to end at Rs 106.46.
The company's market valuation went up by Rs 4,425.84 crore to Rs 30,763.60 crore.
The move comes after a recent announcement wherein the company said it will invest Rs 120 crore through an equity-infusion in its fully-owned subsidiary and student financing arm FinZ Finance Private Limited.
"Physicswallah Limited wishes to inform the exchanges that it is restructuring its lending strategy and has tied up with multiple leading regulated third-party NBFCs to enable student lending needs. This decision reverses the company's earlier approach and is intended to materially reduce balance sheet and credit-related risks for the company," the firm said.
PW said the strategic direction for FinZ Finance will be decided in the near future, subject to the board and other regulatory approvals.
"We received feedback from our partners that our core strength lies in building communities and our online business. Our lending business is best left to regulated third-party NBFCs who have created robust underwriting capabilities.
"We truly believe that prudent capital allocation and shareholder value remain our foremost priority and in light of the feedback received from our partners to the said announcement, we have exercised our fiduciary responsibility to revisit this decision and enable student lending through regulated third-party NBFCs," PW Co-founder Prateek Maheshwari said.
(PTI)
This report was published from a syndicated wire feed. Apart from the headline, the EdexLive Desk has not edited the copy.
