Klassroom's BSE SME IPO closed its second day of bidding at 98% subscription, with retail investors oversubscribing their quota by 1.32X. The edtech startup is looking to raise Rs 39 Cr at the upper price band of Rs 159 per share, and strong demand from individual investors signals confidence in a company that more than doubled its net profit last fiscal year.
By end of trading on August 3, the IPO had received bids for 17.22 lakh shares against 17.58 lakh shares on offer. Retail investors led the charge, placing bids for 10.79 lakh shares against the 8.18 lakh earmarked for them.
Where does institutional demand stand?
Qualified institutional buyers subscribed 68% of their quota, bidding for 3.15 lakh shares against 4.64 lakh reserved for them. Non-institutional investors came in at 67%, with bids for 3.18 lakh shares against 4.76 lakh available.
The disparity is notable. Retail enthusiasm outpacing institutional interest is common in SME IPOs, where ticket sizes are smaller and individual investors often chase listing gains. Whether institutions close the gap on Day 3 will determine how the issue finishes.
What will Klassroom do with the proceeds?
The public issue comprises a fresh issue of 19.89 lakh shares and an offer for sale of 4.66 lakh shares. Net proceeds will go toward technology upgrades, content development, marketing and brand building, and debt repayment. It's a standard deployment mix for an edtech company trying to scale.
Klassroom raised Rs 11.1 Cr from six anchor investors on July 30, ahead of the public opening. Anchor participation at that level suggests some institutional conviction, even if QIB subscription during the public phase has lagged retail.
The financial picture
Klassroom posted a net profit of Rs 7.6 Cr in FY26, up 162% from Rs 2.9 Cr the prior year. Operating revenue hit Rs 23 Cr, a 128% jump from roughly Rs 10 Cr in FY25. For an edtech company going public on the SME board, profitability is a differentiator. Many peers in the sector remain loss-making.
Logicity's Take
Klassroom's financials are unusually clean for an edtech SME IPO. Doubling revenue while posting real profits puts it ahead of many larger peers. The open question is whether these numbers reflect sustainable unit economics or a pre-IPO sprint. Retail investors clearly like the story; institutions are more cautious. Watch Day 3 subscription and listing-day performance to gauge which read was right.
IPO timeline and price band
The price band is set at Rs 151-159 per share. At the upper end, the company targets a Rs 39 Cr raise. Day 3 will close the subscription window, with allotment and listing dates to follow per BSE SME timelines.
Another August IPO in the startup ecosystem, offering context on current market valuations
For fintech and finance teams tracking the SME IPO market, Klassroom's reception offers a data point on investor appetite for profitable, growing edtech plays. The sector has been battered over the past two years; this listing will test whether public markets are ready to reward companies that have cleaned up their balance sheets.
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Source: Inc42 Media / Anne Florentyna
Huma Shazia
Senior AI & Tech Writer
Produced with AI assistance and reviewed by the Logicity editorial team. Learn more in our Editorial Policy.
