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.

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.

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