PHPhysicswallah544609Audit report shared

Monitoring agency flags deviation in IPO proceeds use; company restores Rs. 71.74 crore

CARE Ratings, monitoring agency for the IPO, flagged a deviation in the use of issue proceeds for the quarter ended September 30, 2026.

By ScoutQuest · Wed 4 Nov 2026, 7:33 PM IST · 2 min read

Amount paid from IPO Monitoring Account

Rs. 71.74 crore

Deviation size

less than 10% of the fresh issue

Restoration of funds

full Rs. 71.74 crore restored from its own funds on October 30, 2026

This is the quarterly Monitoring Agency Report from CARE Ratings Limited, the agency appointed to track how Physicswallah used the money raised in its Initial Public Offer (IPO). It covers the quarter ended September 30, 2026.

What the agency reported

• The agency's answer to whether all utilisation is as per the disclosures in the Offer Document is No.
• An amount of Rs. 71.74 crore was paid from the IPO Monitoring Account towards purposes not defined in the offer letter — that is, acquisition of an additional stake in an existing subsidiary, Guiding Light Education Technologies Private Limited.
• This Rs. 71.74 crore formed part of the unutilized amount from the proceeds as at September 30, 2026.
• The agency also notes there was no board approval for the investment in Guiding Light Education Technologies Private Limited, and no board approval for utilisation of funds towards GCP, which is required as per the Prospectus.
• A major deviation was observed over the earlier monitoring agency reports.

How large the deviation is

• The range of deviation is stated as less than 10% of the gross proceeds of the Fresh Issue (Rs. 3,100 crore) and of the unutilized amount (Rs. 1,861.36 crore) as at September 30, 2026.

What was used for the stated objects

• During Q2 FY27, the company utilized Rs. 179.71 crore towards the objects of the issue.

What the company said

• The Board has noted the observations of the Monitoring Agency, the certificate issued by J.C. Bhalla & Co., Chartered Accountants, dated October 30, 2026, and the financial report of the Statutory Auditors.
• The company states that the Rs. 71.74 crore utilised from the IPO Monitoring Account towards the investment in Guiding Light Education Technologies Private Limited has since been rectified, and that it restored the full amount from its own funds to the IPO Monitoring Account on October 30, 2026.

Other checks in the report

• Whether shareholder approval was obtained in case of material deviations from expenditures disclosed in the Offer Document: Not Applicable.
• Whether the means of finance for the disclosed objects of the issue have changed: No.

What this means for a retail investor

• The report records that money from the IPO account was used for a purpose outside the offer letter, and that board approvals the Prospectus requires were not in place for that investment and for use of funds towards GCP.
• The same report records that the amount has been put back into the IPO Monitoring Account from the company's own funds.
• The IPO size referred to here is the Rs. 3,100 crore fresh issue, excluding an offer for sale of Rs. 380 crore.

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