Fusion Klassroom Edutech IPO (31 July - 4 August) Analysis

IPO Analysis | BSE SME | 100% Book Built Offer (Fresh Issue and Offer for Sale) | Regulation 229(1) and 253(1)

Based on Red Herring Prospectus dated July 22, 2026 | Hybrid EdTech (AI enabled Education OTT and Offline Coaching Centres) | Mumbai, Maharashtra

STATUS: LIVE RHP, BIDDING OPENS JULY 31, 2026 AND CLOSES AUGUST 4, 2026

Fresh Issue: up to 19,89,400 Equity Shares | Offer for Sale: up to 4,65,800 Equity Shares | Total: up to 24,55,200 Equity Shares

BSE SME Platform | Anchor Bid: July 30, 2026 | Best in class RoNW of 53.45% among a mixed profitability peer set

 Fusion Klassroom Edutech Limited was founded by Alka Nikhil Javeri, Dhruv Nikhil Javeri and Dhumil Nikhil Javeri and incorporated on November 3, 2016 as Fusion Klassroom Edutech Private Limited. It converted to a public limited company on September 29, 2025, taking its present name under a fresh certificate of incorporation dated November 17, 2025. Its CIN is U74999MH2016PLC287390 and its registered office is at Matruprabha, Plot No. 78, Daulat Nagar Road 7, Borivali East, Mumbai. The Promoters are Mrs. Alka Nikhil Javeri, Mr. Dhruv Nikhil Javeri and Mr. Dhumil Nikhil Javeri.

The Company operates a hybrid learning ecosystem branded Klassroom, combining 30 offline partner centres with an AI enabled Education OTT app offering more than 100 courses. As of the RHP, the platform has attracted more than 6 lakh learner registrations, over 2 lakh subscribers and more than 1 lakh app downloads.

Klassroom began in 2016 as an offline tutoring partner network for Grades 6 to 12 and JEE or NEET aspirants, added a digital academy during 2020 to 2021, and has since built a significant government and institutional franchise, including a Memorandum of Understanding with the Government of Rajasthan, execution of PM Shri Schools and Jawahar Navodaya Vidyalaya projects, an RSLDC skilling project, a girl child digital education initiative in Uttar Pradesh reaching over 1,000 beneficiaries, and partnerships with NSDC, TSSC and MSSDS for AI and ML training rollouts across Maharashtra.

The Company turned profitable during Fiscal 2024 after a loss the prior year, and has since scaled rapidly: revenue from operations grew from Rs.458.30 Lakhs in Fiscal 2024 to Rs.2,303.95 Lakhs in Fiscal 2026, with profit after tax rising from Rs.34.38 Lakhs to Rs.760.12 Lakhs over the same period. Recent developments include the December 2025 bonus issue, the buildout of an AI powered agentic learning stack under the Objects of this Offer, and continuing expansion of offline centres and government skilling tie ups.

Founder Alka Nikhil Javeri was invited for a live interaction with the President of India as a woman led startup founder, and the Company was a finalist at the National Startup Awards.

Key Basics

Particulars	Details
Document Type	Red Herring Prospectus (RHP) dated July 22, 2026. This is a live offer, not a draft: Bid or Offer opens July 31, 2026 and closes August 4, 2026 (Anchor Bid July 30, 2026), which is imminent relative to the date of this analysis.
Issue Structure	100% Book Built Offer comprising a Fresh Issue of up to 19,89,400 Equity Shares and an Offer for Sale of up to 4,65,800 Equity Shares by 18 Selling Shareholders, aggregating to up to 24,55,200 Equity Shares. Face value Rs.10 per share.
Face Value	Rs.10 per Equity Share.
Promoters	Mrs. Alka Nikhil Javeri, Mr. Dhruv Nikhil Javeri and Mr. Dhumil Nikhil Javeri, together holding 54.88% of pre Offer equity share capital along with the other Directors and KMP shareholders listed in the RHP.
Selling Shareholders and WACA	3 Promoter Selling Shareholders (Alka Nikhil Javeri, Dhruv Nikhil Javeri, Dhumil Nikhil Javeri), each at a nominal WACA of Rs.0.02, together offering up to 3,52,048 shares; and 15 Investor Selling Shareholders offering the balance up to 1,13,752 shares, at WACAs ranging from Rs.25.18 (Abhijeet Kumar) up to Rs.131.48 (Ashish Sarser).
Eligibility Route	Regulation 229(1) and 253(1) of Chapter IX of the SEBI ICDR Regulations, 2018, since the Company's post Offer paid up capital is less than Rs.1,000 Lakhs.
Listing Exchange	BSE SME Platform, with in principle approval dated May 6, 2026.
BRLM	Narnolia Financial Services Limited.
Registrar	Maashitla Securities Private Limited.
Bid or Offer Dates	Anchor Bid: Thursday, July 30, 2026. Opens: Friday, July 31, 2026. Closes: Tuesday, August 4, 2026.
Listed Peers, One Line	4 listed peers of widely varying scale and profitability (Physicswallah, MPS Limited, Verand Learning Solutions, Arihant Academy), 2 of which are currently loss making at the RoNW level.

The most structurally distinctive feature of this offer is timing: unlike most reports in this series that were DRHPs at filing stage, this is a live RHP with the bidding window opening in days. The offer is also entirely a Market Maker reserved SME issue with the Promoters holding a majority stake post issue, and combines a small Fresh Issue with a modest Offer for Sale largely from early investor shareholders rather than the Promoters themselves in value terms.

How Will the IPO Money Be Used?

Object	Estimated Amount (Rs. Lakhs)	Substantiation
Prepayment or repayment of borrowings	235.61	Fully itemised: 8 named lender facilities, all working capital linked overdrafts or term loans, with a certified schedule of outstanding amounts as of July 10, 2026
Technology and AI/ML model development, servers and cloud infrastructure	671.10	Substantiated by two signed vendor quotations (Appiness Interactive Private Limited) covering an 18 to 24 month technology build and hosting program, broken down by role and monthly cost
Content development capital expenditure	535.43	Stated as capital expenditure for proprietary course content; itemisation of this component was not reproduced in full in this summary and should be checked against the RHP for vendor level detail
Offline centre expansion, equipment (desktops and laptops for AI/ML labs)	195.00	Itemised as procurement of desktops and laptops for AI/ML labs at new centres
Marketing initiatives	521.97	Stated as a lump sum marketing spend; no itemised campaign level or vendor level breakup provided
Inorganic growth (unidentified acquisitions) and general corporate purposes	[TBD]	Amount undisclosed; capped in aggregate at 35% of Fresh Issue gross proceeds, of which unidentified acquisitions cannot exceed 25% and general corporate purposes cannot exceed 15% or Rs.10 Crore, whichever is less. No specific target has been identified.

The capital expenditure plan is reasonably well substantiated for its two largest identified items: the borrowing repayment is backed by a named, dated schedule of 8 specific loan facilities and outstanding balances certified by the statutory auditor, and the technology and AI buildout is backed by signed third party vendor quotations with a role by role, month by month cost breakup.

However, close to a quarter to a third of the Net Proceeds sits in a bucket for unidentified acquisitions and general corporate purposes with only a regulatory percentage cap and no named target, vendor, or purchase order, which is the least substantiated portion of the plan and the one investors should weight most cautiously. Since the Offer Price itself is not yet fixed, the Gross Proceeds and Net Proceeds figures remain blank throughout the RHP and will only be finalised in the Prospectus.

Financial Performance

P&L and Key Performance Indicators (Rs. Lakhs unless stated)

Particulars	FY 2026	FY 2025	FY 2024
Revenue from operations	2,303.95	1,008.65	458.30
Total income	2,310.21	1,010.58	462.39
EBITDA	1,299.00	406.35	101.54
EBITDA margin (%)	56.38	40.29	22.16
Profit after tax	760.12	290.42	34.38
PAT margin (%)	32.99	28.79	7.50
Basic EPS (Rs.)	13.96	5.36	0.63
Return on equity / RoNW (%)	53.45	41.66	13.08
Net worth	1,841.47	1,002.62	391.74
NAV per equity share (Rs.)	25.22	14.29	5.65

Balance Sheet and Cash Flow Highlights (Rs. Lakhs)

Particulars	FY 2026	FY 2025	FY 2024
Total assets	2,545.86	1,206.12	448.48
Total borrowings (long and short term)	342.61	101.36	32.46
Net cash from operating activities	1,071.40	354.93	93.84
Net cash used in investing activities	(1,243.54)	(595.41)	(176.04)
Net cash from financing activities	248.29	332.87	95.72
Net increase in cash and cash equivalents	76.14	92.39	13.52

The headline numbers show a company scaling very fast off a small base: revenue from operations grew approximately 120% in Fiscal 2025 and a further 128% in Fiscal 2026, while PAT grew from Rs.34.38 Lakhs to Rs.760.12 Lakhs over the same 2 years, a compounding effect the Company's own Risk Factors caution investors not to extrapolate. Independent recomputation confirms the RHP's own stated revenue growth figures (approximately 120% and 128% year on year) reconcile with the disclosed endpoint numbers.

Importantly, the 3 year restated table in this RHP covers only FY 2024 to FY 2026; the RHP separately discloses, only within its Risk Factors and not in the headline financial summary, that the Company incurred a loss of Rs.68.08 Lakhs in Fiscal 2023, immediately before the growth and profitability run shown above began.

Cash flow deserves a specific comparability caveat. The Risk Factors section is titled around 'negative cash flow', but on inspection this refers only to investing activities, which were negative in all 3 years (reflecting heavy, deliberate capital expenditure on intangible content and property, plant and equipment) while operating cash flow was positive and growing in all 3 years and overall net cash increased every year.

Readers should not mistake the risk factor's headline framing for an operating cash flow problem; the underlying picture is a capital expenditure heavy but operationally cash generative business. Total borrowings, while growing in absolute terms, remain modest in scale relative to the balance sheet, and the Debt-Equity ratio was reported at 0.19 times as of FY 2026.

How Does It Compare to Peers?

Company	Revenue FY26 (Rs. Lakhs)	EPS (Rs.)	Share Price / P/E	RoNW (%)	Book Value/Share (Rs.)
Fusion Klassroom Edutech Limited	2,303.95	13.96	N/A (Price TBD)	53.45	25.22
Physicswallah Limited	2,88,664	(0.86)	119.50	(15.96)	15.80
MPS Limited	72,689	87.80	1,878.00	31.12	279.69
Verand Learning Solutions Limited	35,773	(34.73)	202.80	(97.93)	34.54
Arihant Academy Limited	3,233	20.76	455.00	13.80	41.35

The RHP discloses 4 listed peers, but the comparison should be read with real caution rather than taken at face value. The set spans wildly different scales, from Arihant Academy at roughly Rs.32 Crore of revenue to Physicswallah at nearly Rs.2,887 Crore, more than 100 times larger than Fusion Klassroom itself.

More importantly, 2 of the 4 named peers, Physicswallah and Verand Learning Solutions, are currently loss making with negative RoNW of (15.96)% and (97.93)% respectively, so a straightforward industry average P/E or RoNW comparison would be misleading. On a like for like RoNW basis, Fusion Klassroom's 53.45% is the highest in the set, ahead of the next best, MPS Limited, at 31.12%, though MPS operates a different, more established publishing and content services model rather than a directly comparable coaching or Education OTT business.

Investors should treat this table as directional context on a fragmented, unevenly profitable listed EdTech peer group rather than a precise valuation anchor.

Key Risks to Know Before Applying

l Revenue is meaningfully concentrated: the single largest customer contributed 40.11% of revenue in FY 2026 (down from 54.76% in FY 2024), and the top 5 customers together contributed 75.65% of FY 2026 revenue, so the loss or renegotiation of a small number of relationships could have an outsized impact.

l Revenue is also geographically concentrated, with Uttar Pradesh, Maharashtra and Rajasthan together contributing 92.76% of FY 2026 revenue; any state level policy shift, especially given the Company's reliance on government and institutional projects in these states, could disproportionately affect results.

l The Company's own Risk Factors caution that FY 2025 and FY 2026 revenue growth of approximately 120% and 128%, and the accompanying jump in profitability, may not repeat; the RHP separately discloses a Rs.68.08 Lakh loss in Fiscal 2023, immediately preceding the 3 year track record shown in the headline financial summary, a data point easy to miss since it falls outside the restated 3 year table.

l Approximately a quarter to a third of Net Proceeds is earmarked for unidentified acquisitions and general corporate purposes, with only a percentage cap and no named target, vendor, or purchase order, making this the least verifiable portion of the use of proceeds.

l Recent share issuances, including a bonus issue in December 2025 and an allotment on conversion of preference shares and under an ASOP at an issue price of Rs.52,725 per share (pre bonus), were made at prices that may be well below the eventual Offer Price, meaning the Promoters' and certain shareholders' cost of acquisition is likely to be a small fraction of what public investors will pay.

l The Company has certain borrowings that are repayable on demand, which could require rapid deployment of cash or liquid resources if lenders call them, straining working capital at short notice.

l The Company operates from a single leased registered office in Mumbai under a lease expiring May 2, 2027, with no guarantee of renewal on similar terms.

l The Company has a history of delayed statutory filings with the Registrar of Companies (11 instances of forms such as ADT-1, PAS-3, MGT-14 and INC-27 filed late, with delays ranging from 8 to 2,958 days) and delayed GST return filings in several months of FY 2023, attributed to the prior absence of a full time Company Secretary; a full time Company Secretary has since been appointed.

l The Company delivers a portion of its services through 25 to 30 third party partner centres that are not under its direct operational control, exposing it to quality, compliance and brand risk if a partner underperforms.

l The business depends on continued investment in and successful execution of AI and ML based education technology, an area the Company itself flags as carrying significant execution and regulatory uncertainty.

l The Company has not obtained insurance coverage against certain operating hazards.

l As an education services provider, an 18% GST rate applies to coaching and training services, and any adverse change in GST treatment could affect affordability and demand.

Positives to Note

l Profitability has scaled sharply and consistently: PAT grew from Rs.34.38 Lakhs in FY 2024 to Rs.290.42 Lakhs in FY 2025 to Rs.760.12 Lakhs in FY 2026, with EBITDA margin improving from 22.16% to 56.38% over the same period.

l Return on net worth of 53.45% in FY 2026 is the highest among all 4 named listed peers, 2 of which are currently loss making, suggesting relatively efficient capital use for the scale of the business.

l The largest identified capital expenditure item, the AI and technology buildout (Rs.671.10 Lakhs), is backed by signed, itemised third party vendor quotations with a role level, month by month cost schedule rather than a vague allocation.

l Customer concentration, while still meaningful, has genuinely improved: the top single customer's share of revenue fell from 54.76% in FY 2024 to 40.11% in FY 2026, evidencing real diversification rather than a static risk.

l The Company has an established, multi year track record of government and institutional partnerships, including a Rajasthan government MoU, PM Shri Schools and Jawahar Navodaya Vidyalaya projects, an RSLDC skilling project and a Uttar Pradesh girl child digital education initiative, which is a genuine, verifiable distribution and credibility moat that is difficult for purely digital competitors to replicate quickly.

l The RHP discloses no material data security breaches, litigation-driving safety incidents, or fraud events to date, and outstanding contingent liabilities are minimal (Rs.0.50 Lakhs, fully secured by a lien on fixed deposits of the same amount).

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