Edtech firm PhysicsWallah’s wholly owned subsidiary FinZ Finance has agreed to promote, switch and assign a mortgage portfolio value Rs 95.79 crore to Auxilo Finserve, as the corporate scales again its direct lending operations.

The deed of project was executed on 3 October 2026, and the transition of the loans and debtors is predicted to be accomplished inside 60 days, PhysicsWallah stated in a inventory alternate submitting.

The portfolio represents a considerable or main a part of FinZ Finance’s complete mortgage guide, and the transaction is predicted to lead to a partial or piecemeal closure of its lending operations.

Auxilo Finserve is an NBFC registered with the RBI and focuses totally on schooling finance.

PhysicsWallah stated the transaction kinds a part of a broader change in technique aimed toward concentrating on its core enterprise and bettering the best way it allocates capital.

“The closure of a considerable/main a part of the overall mortgage portfolio of FinZ Finance kinds a part of a broader strategic realignment, with a view to specializing in the corporate’s core enterprise operations and optimising capital allocation,” the submitting stated.

Going ahead, PhysicsWallah plans to facilitate lending via established and controlled third-party NBFCs as a substitute of carrying the lending publicity via FinZ Finance.

The corporate stated the change is predicted to enhance operational effectivity and scale back the balance-sheet publicity and credit score dangers related to lending.

Shift away from direct lending

The portfolio switch follows PhysicsWallah’s resolution earlier this 12 months to alter its pupil financing technique.

On 4 June, the corporate stated it could work with regulated third-party NBFCs to satisfy pupil financing necessities, with PhysicsWallah appearing as a know-how platform connecting college students with lending companions.

PhysicsWallah co-founder Prateek Maheshwari stated on the time “Our lending enterprise is greatest left to regulated third-party NBFCs who’ve created sturdy underwriting capabilities.”

The change got here shortly after PhysicsWallah had dedicated contemporary capital to FinZ Finance.

On 27 Could, the corporate’s Audit Committee approved an investment of roughly Rs 120 crore within the subsidiary via a rights situation. PhysicsWallah stated the funds can be used to strengthen FinZ Finance’s working capital and help the growth and scaling up of its operations.

The corporate’s monetary outcomes for the quarter ended 30 June subsequently recorded that Rs 120 crore had been invested within the fairness shares of FinZ Finance.

FinZ Finance obtained its NBFC licence from the RBI in September 2025.

Earlier lending mannequin

Earlier than altering its technique, PhysicsWallah had deliberate to increase schooling financing via its personal NBFC.

Throughout an earnings name in Could, administration stated the lending initiative had beforehand been operated in partnership with an exterior NBFC and had disbursed almost Rs 200 crore in loans over about two years.

It stated non-performing belongings have been under 1%, whereas about 70% of the loans have been primarily for PhysicsWallah college students and the remaining 30% have been for college kids exterior the platform.

The corporate additionally stated the loans have been typically brief time period, with 99% having a period of lower than one 12 months.

Requested in the course of the earnings name whether or not loans can be offered via PhysicsWallah’s personal NBFC, administration stated “Sure, so we acquired NBFC license from RBI and sure, we can be giving loans via that NBFC solely.”

PhysicsWallah subsequently modified that method in favour of regulated third-party lenders.

The switch of the Rs 95.79 crore portfolio to Auxilo is the most recent step in implementing that technique, lowering FinZ Finance’s direct lending publicity whereas permitting PhysicsWallah to proceed facilitating financing for college kids via exterior lending companions.