Shining Tools Ltd.

About Shining Tools

Incorporated in 2013, Shining Tools makes cutting tools such as end mills, thread mills, drills and reamers for CNC machines. Its products are used in automotive, aerospace, defence, medical, power and energy, mould and die, casting and foundry, and general engineering. As of July 28, 2025, installed capacity was 1,25,000 pieces per annum. The company is ISO 9001:2015 accredited and uses German-made Zoller machines for quality checks.

Shining Tools IPO Details

Use of IPO Proceeds

• Plant and machinery: 9.06 INR Cr. is allocated for the purchase and installation of plant and machinery for Carbide Tools.
• Working capital: 3.85 INR Cr. is allocated for funding working capital.
• General corporate purposes: 2.48 INR Cr. is allocated for general corporate purposes.

Strengths

• Planned capacity expansion: IPO proceeds will fund six machines, taking capacity from 1,25,000 units p.a. to 2,75,000 units p.a. The new capacity is expected to begin its production ramp-up by January 2026 and contribute an estimated ₹3–3.5 crores in revenue during the last quarter of FY26.
• Growing customized-tools mix: The company plans to add products, with an emphasis on complex, high-margin customized tools. Customized tools’ share of revenue rose from 52.73% in FY23 to 73.19% in FY25.
• Reconditioning and distribution plans: Shining Tools aims to pilot 2-3 reconditioning facilities in Madhya Pradesh and Maharashtra and develop a distributor network in industrial belts such as MIDC and GIDC.

Shining Tools Key Financials

IPO Valuation and Our View

At the final issue price of INR 114 per share, the IPO is valued at a P/E ratio of 22x based on FY25 PAT. The report cites concerns about the stretched working capital cycle, competition and elevated issue valuation, and concludes that there is little room for comfort. Minerva Capital Research Solutions rates the IPO AVOID.

INR 114 per share

Final IPO price

~INR 64.5 Cr.

Implied market capitalisation

22x

P/E based on FY25 PAT

AVOID

Recommendation

Key Risks

• Raw material prices: Tungsten Carbide prices surged 68% in the first 9 months of 2025, creating a key monitorable for the company.
• Receivables and working capital: Receivables increased from 2.37 Cr in FY24 to 5.11 Cr in FY25, a 115.6% increase. Receivable days of 127 are at the higher end of the peer range of 60-90 days cited in the report.
• Short-term debt: As of July 2025, 58% of total debt was short term; the report flags this against the company’s history of over leverage.
• Competition: The company operates in a highly competitive machine tools industry with organized and unorganized players.
• Outsourced coating: Coating of solid carbide tools is outsourced to 2 entities, creating dependency for the finished product.

Revenue Mix

Customized tools made up an increasing share of revenue, while standardized tools and reconditioning services declined as shares of the mix. Realisation per unit also rose over the reported years.

The report notes that eliminating plant and machinery rental cost of Rs. 1.55 Cr was followed by margin expansion; the plant and machinery was later acquired for 1.4 crores. It also states that average price growth for some products was 22% in FY25 compared with FY24.

Management

• Vipulbhai Laljibhai Ghonia: The Promoter and Managing Director has over 12 years of experience in the business and oversees routine financial operations, client relationships and HR processes.
• Kamalbhai Laljibhai Ghonia: The Promoter and Whole Time Director has over 10 years of experience in CNC milling operations, product designing, geometry development for machining applications and tools grinding techniques.

Our View

The planned capacity increase and rising contribution from customized tools are key parts of the IPO case. However, the report highlights stretched working capital, raw material price volatility, competition and reliance on external coating providers. It assigns an AVOID rating at the issue price.

Standard disclosures

• Research Analyst has served as an officer, director or employee of subject company(ies): No
• We or our associates have received compensation from the subject company(ies) in the past 12 months: No
• We or our associates have managed or co-managed public offering of securities for the subject company(ies) in the past12 months: No
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• We or our associates may have received compensation or other benefits from the subject company(ies) or third party in connection with the research report –No
• We or our associates or Research Analyst or his/her relative's financial interest in the subject company(ies)- No
• Nature of financial interest in subject company, if any –Nil
• We, our associates or Research Analyst have actual/beneficial ownership of 1% or more securities of the subject company (ies) at the end of the month immediately preceding the date of publication of Research Report – No
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Regulatory disclosures

Minerva Capital Research Solutions is an independent investment advisory firm founded by Nishant Gupta(SEBI registration no. INH000018896).

Registration granted by SEBI and certification from NISM in no way promise or guarantee that the research recommendation will provide any assured, minimum or risk-free return to the investors.

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For any queries or grievances: Mr. Nishant Gupta | Email: nishant.gupta@mcapital.in or guptanishant.iimi@gmail.com | Contact Number: 8171433387 | Website: www.mcapital.in | Twitter: @Mcapital_In

• Research Analyst for this report: Mr. Shubham Upadhyay (+91-9953459775)

Rating rationale

Minerva Capital Research Solutions endeavors to provide objective opinions and recommendations. Ratings are assigned to stocks according to their fair value vs current market price and then categorizes them as Buy, Hold, Reduce, Sell. The performance horizon is one year unless specified and fair value is defined as analyst’s valuation for a stock.

• Buy:> 15%
• Hold: -5% to 15%
• Reduce: -15% to -5%
• Sell: <-15%