Shayona Engineering IPO Analysis

Shayona Engineering IPO Analysis 

As India's manufacturing boom fuels precision engineering demand, Shayona Engineering specialises in castings & CNC parts for auto, defence, and oil.

Let’s explore this upcoming IPO further:

Shayona Engineering‘s share price will be finalised post-allotment, while grey market cues through the Shayona Engineering‘s IPO GMP will likely reflect market sentiment closer to listing.

India's precision engineering industry focuses on alloys and steel components through CNC machining, investment castings, heavy fabrication, and process automation systems. The components primarily serve automotive giants, oil & gas firms, aerospace & defence players, and infrastructure projects.

SMEs dominate with end-to-end capabilities from casting to surface treatment & assembly, giving OEMs one-stop convenience over fragmented vendor coordination, though skilled labour gaps and diversified supplier base.

India's Precision Engineering market size was valued at $0.54 B in 2025 and is projected to grow at a CAGR of 7.2% from 2025 to 2032.

Precision engineering in India offers solid growth potential through PLI schemes and infrastructure spending, but execution hurdles like skilled labour shortages and raw material volatility keep it a tough game. Winners emerge from reliable SMEs that master integrated operations and upgrade machinery. 

Company Origin Story

Prior to its incorporation as a private limited company in 2017, Shayona Engineering operated as a proprietorship firm established in 2010 by Vipul Solanki. The firm initially focused on basic machining and fabrication services with a workshop in GIDC Makarpura, Vadodara. 

Coming to the business, Shayona makes precision metal castings (steel, stainless steel, nickel alloys) and CNC machined parts for autos, defence, oil & gas, pumps/valves. The company also does heavy fabrication, forging, and recently added HDPE/PVC pipes & fittings for agri/infra. It operates entirely from its manufacturing facilities in Vadodara, Gujarat—prime location tapping into the state's robust auto and engineering ecosystem.

Let us understand the different product categories by Shayona Engineering

Engineering:

• CNC/VMC machined components

• Heavy metal fabrication (pressure vessels, silos, PEB structures)

• Turnkey automation systems

• Tubular conveying systems

• Die head trolleys & mixing machines

Plastics:

• PVC pipes (SWR, agriculture)

• HDPE pipes & fittings (irrigation)

• UPVC pipes (under expansion)

Castings:

• Sand castings (up to 3MT/piece)

• Centrifugal castings

• Investment/lost wax castings (a few grams to 500kg)

• Strategic vendor tie-ups for special grades

Revenue-wise segment%

• The revenue mix shows a clear shift over time across segments. Engineering has become the primary driver of the business, experiencing strong growth and dominance in FY25, indicating the company’s increasing focus and strength in this segment. 

• Plastic revenue has remained fairly stable in earlier years but drops sharply in FY25, indicating either lower demand or a strategic pullback. Plastic, however, still holds a meaningful share as of November 2025. 

• Casting has seen a gradual decline in its contribution over the years, suggesting slower growth or reduced importance compared to other segments.

• Overall, the trend indicates a business that is increasingly engineering-led, with plastic and casting playing more of the supportive roles.

(*Note: It must be noted that the company has not yet disclosed its manufacturing capacity.)

The top line has given a decent growth of around 35% CAGR from FY23 to FY25. While the growth in FY25 has been at 51%. The revenue, as per 8MFY26, however, seems to be slightly moderate in terms of annualised growth. 

Margins have improved moderately, with EBITDA margins expanding from to 9.2% in FY23 to 21.6% in FY25. The PAT margins have risen from 4.8% in Fy23 to 10.4% in Fy25. The management has claimed higher capacity utilisation and production optimisation as the reason for the margin increase.

The CFO, which was on the negative side in past years, has now been positive in Fy25 at 2.3Cr. 

Coming to the cash conversion cycle, being at 110 days in Fy25, has substantially increased over the years. The Management has cited the extension of the credit terms & period as the primary reason for this increase. 

Shayona Engineering has maintained its debt level, with the yearly D/E ratio trend being maintained, and currently at 1.8 in Fy25. 

ROE and ROCE stand at 35% and 29%, placing Shayona Engineering above the listed peers. The company has also maintained its current ratio well over the years, currently at 1.2.

Management + Promoter Holding

Shayona Engineering's promoters—Vipul Solanki, Gaurav Parekh, and Kinnariben Solanki—collectively bring proven engineering expertise built over 8+ years in precision manufacturing.

The promoters guide Shayona through hands-on expertise in CNC machining, heavy fabrication, and PVC/HDPE pipe production. They excel at turnkey automation projects, building OEM ties in automotive and oil & gas, and growing capacity in Vadodara's industrial hub.

While three out of six board members are independent directors, governance ensures quality, as independent directors lead the audit and remuneration committees. 

From a control standpoint, the promoters hold a dominant 87.3% stake pre-issue. Post-IPO, this stake will dilute to 64.2%, but promoter influence will remain firmly intact, given their high base ownership and board control.

Peer Analysis (FY25)

For peer comparison, not many listed peers with a small base and similar business segments could be found. The peers mentioned here are primarily engaged in CNC & Precision engineering, which are similar business lines to our company.

On the basis of peer analysis, it can be said that Shayona Engineering has a moderate level of financials. The EBITDA & PAT margins stand at 21.6% and 10.4%, respectively, being on the higher side relative to the peers.  

The return ratios are currently in the industrial range, with ROE & ROCE at 35% & 29%, respectively.

In terms of valuation, Shayona Engineering lies on the higher side with a post-issue P/E ratio at 15.3x. The EV/EBITDA also stands higher at around 11.2x. 

Coming to the borrowings, the company carry higher debt in its balance sheet, with a D/E ratio currently at 1.4.

Overall, in terms of margins and valuation, when compared to peers, it can be said that the company has a moderate level of financials, requiring focused efforts by the management. 

The company will be using the proceeds for:

Capital expenditure (₹379 lakhs): Purchase of plant and machinery to enhance existing PVC/HDPE pipe production lines and precision engineering capacity at Unit-1 (Makarpura) and Unit-2 (Menpura) 

Debt repayment (₹217 lakhs): Prepayment of secured term loans from financial institutions (primarily Electronica Finance), reducing interest burden and improving D/E ratio from 1.83x (Nov 2025). 

Working capital needs (₹400 lakhs): Funding raw material procurement (metals, PVC/HDPE resins), scaling machined components/casting production, and managing ₹12.17 Cr trade receivables amid project-based revenue cycles. 

General corporate purposes (balance): Strategic initiatives, including technology upgrades, quality certifications, and other permissible expenses (≤15% gross proceeds or ₹2.23 Cr max) within SEBI limits. 

Overall, the issue aims to strengthen manufacturing capacity, deleverage the balance sheet, and fuel working capital for engineering/plastics growth targeting automotive/infrastructure demand.

At Alpha Venture X Fund, we assess opportunities through our LMVT framework — Leadership, Moat, Valuation, and Tailwinds — enabling us to identify scalable businesses with durable fundamentals.

Leadership: Founder-led with strong industrial experience and equity retention, ensuring aligned execution and focus on scaling the brass components business.

Moat: Despite having in-house manufacturing, the company lacks a moat since CNC & metal components are a commoditised business. Putting it at risk in terms of expansion. 

Tailwinds: Rise in precision engineering market, fuelled by auto and defence components. 

Valuation: The company is valued at a higher range, with P/E being at 15.3x; the EV/EBITDA ratio is also on the higher side, currently around 11.2x. 

Bottom Line: Shayona has given decent revenue growth. The company, however, has substantially increased its cash conversion cycle and is currently overvalued, backed by higher debt relative to its peers. The business lacks a moat, making Shayona Engineering a selective, not an automatic buy.