PhysicsWallah is stepping back from direct student lending, signalling a sharp change in strategy only months after putting fresh capital behind its lending arm FinZ Finance.
FinZ has agreed to sell a ₹95.79 crore loan portfolio to education-focused NBFC Auxilo Finserve. The transaction covers a substantial portion of FinZ’s loan book and is expected to lead to a partial closure of its direct lending operations, with the transfer of borrowers and loans targeted for completion within 60 days.
The move marks a quick reversal. In May, PhysicsWallah’s audit committee approved an investment of about ₹120 crore in FinZ to fund working capital and expansion. At the time, management said future education loans would be originated through the company’s own RBI-licensed NBFC. FinZ itself had received its RBI licence only in September 2025.
PhysicsWallah is now choosing a lighter model. Going forward, student financing will be facilitated through regulated third-party NBFCs rather than being carried directly on FinZ’s balance sheet. The company said the shift is part of a broader strategic realignment focused on its core business, better capital allocation and lower credit and balance-sheet risk.
The change does not mean PhysicsWallah is abandoning education finance altogether. Students can still be connected with lenders, but the underlying loans and underwriting risk will sit with specialist financial institutions instead. That distinction matters as the company tries to balance growth with investor expectations around disciplined capital deployment.
The bigger story is therefore less about exiting lending and more about drawing a clearer line between education and credit. PhysicsWallah can continue using financing to improve course accessibility, while leaving the risk-heavy lending business to regulated NBFCs built specifically to manage it.
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