Edtech company PhysicsWallah’s wholly owned subsidiary FinZ Finance has agreed to sell, transfer and assign a loan portfolio worth Rs 95.79 crore to Auxilo Finserve, an NBFC registered with the Reserve Bank of India (RBI).
The transaction covers a substantial or major part of FinZ Finance’s total loan book and is expected to result in the partial or piecemeal closure of the subsidiary’s direct lending operations.
The deed of assignment was executed on October 3, 2026. The transition of the loans and borrowers is expected to be completed within 60 days.
The move marks a change in PhysicsWallah’s approach to student lending. The company had earlier positioned FinZ Finance as its in-house lending arm, allowing it to provide loans to students from its own books. However, PhysicsWallah later decided to move away from the on-book lending model and instead work with established and regulated third-party NBFCs to facilitate loans for its students.
“The closure of a substantial/major part of the total loan portfolio of FinZ Finance forms part of a broader strategic realignment, with a view to focusing on the company’s core business operations and optimising capital allocation,” PhysicsWallah said in its stock exchange filing.
Going forward, PhysicsWallah plans to facilitate lending through established and regulated third-party NBFCs rather than directly carrying the loans on its balance sheet. The company said the shift would help improve operational efficiency while reducing the balance-sheet and credit risks associated with lending.
Auxilo Finserve is an RBI-registered NBFC primarily focused on the education sector. The transfer of FinZ Finance’s loan portfolio to Auxilo is therefore part of PhysicsWallah’s move towards a partner-led lending model.
FinZ Finance received its NBFC licence in September 2025 and commenced operations in February 2026. The subsidiary primarily catered to PhysicsWallah’s students, with around 70-75 per cent of loans extended to students already enrolled on the platform.
The development comes after PhysicsWallah had outlined plans in May 2026 to invest Rs 120 crore in FinZ Finance through a rights issue. The company subsequently changed its lending strategy and opted to work with third-party NBFCs instead of expanding its own direct lending operations.
PhysicsWallah reported a 24.4% year-on-year increase in revenue from operations to Rs 1,054 crore in Q1 FY27, while its net loss narrowed 30.7% to Rs 88 crore. Its online business grew 33.3% to Rs 549 crore, while offline revenue increased 14.5% to Rs 490 crore during the quarter.
Following the announcement, PhysicsWallah’s share price rose more than 6% during Monday’s trading session. The stock was trading at Rs 128.1 as of 2:46 PM, giving the company a market capitalisation of around Rs 37,812 crore.
The sale of the loan portfolio represents a significant shift in PhysicsWallah’s lending strategy as the company moves to focus on its core education business while continuing to facilitate student financing through regulated lending partners.
