Edtech firm PhysicsWallah (PW) has moved decisively to reduce its exposure to direct student lending, with its wholly-owned subsidiary FinZ Finance agreeing to sell a Rs 95.79 crore loan portfolio to Auxilo Finserve, an RBI-registered NBFC focused on education finance.

The deal covers a substantial or major part of FinZ’s loan book and is expected to result in a partial closure of its lending operations, PW said, adding the transition of the loans and borrowers should be completed within 60 days.

The significance of this move lies in the speed of the reversal.

In its October 4 filing, PW said “the closure of substantial/major part of the total loan portfolio of FinZ Finance forms part of a broader strategic realignment,” aimed at focusing on the core business, optimising capital allocation and reducing balance-sheet and credit risks.

Going forward, lending will be facilitated through regulated third-party NBFCs instead of being carried directly through FinZ, the Noida-based firm noted.

On May 27, PW’s Audit Committee approved an investment of approximately Rs 120 crore in FinZ through a rights issue to fund working capital and expand the business. FinZ had received its RBI licence in September 2025 and had only recently begun operations.

In the May 27 earnings call, management said the model was built on an earlier partnership with an external NBFC that had disbursed nearly Rs 200 crore over about two years, with less than 1% NPA, or non-performing assets, and around 70% of loans going to PW students.

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