Cutting Tools Sector – closely corelated to India’s manufacturing growth!!

Industrial Update – Newsletter – May 2025

IMAP’s Industrials group brings you this monthly update with a focus on latest news, transactions and interesting snippets from the Industrials domain in India

Cutting tools and inserts are specialized instruments used to shape, carve, or remove material from a workpiece (metal, plastic, or composite) during the manufacturing process. These tools are typically mounted on machines for operations such as turning, milling, drilling etc. to produce components.

Demand for these tools is driven by a growth in machining, primarily used for manufacturing critical products in sectors like auto, aerospace, railways, electrical and medical among others. These tools are crafted from materials such as high-speed steel (HSS), tungsten carbide, titanium carbide, cubic boron nitride (CBN), ceramics and polycrystalline diamond (PCD) – materials chosen due to its hardness, durability and ability to withstand heat and pressure.

While HSS is popular for general machining, the tools more often used for precision manufacturing comprises Carbide, Ceramic, CBN and PCD. While HSS tools are versatile and affordable, CBN excels at hard materials and PCD for non-ferrous and composite materials. Tools are also either customized for specific operations or are standard off-the-shelf tools. Precision tools are typically made through processes like powder metallurgy (combining fine powders of the desired material with a binder) , sintering, cutting/machining and finishing.

India’s tooling market is characterized by the presence of global players operating through JV’s or subsidiaries as well as smaller domestic players operating in specific tool segments. With the growth in manufacturing, the demand for high-quality tooling solutions has increased; is expected to grow at a CAGR of ~11% going forward

Key Players

Some recent transactions

May’25	FleetX	The logistic-technology company raised ~₹110 Cr. in a fundraise led by India Mart, and Beenxt Ventures
May’25	Noble Hygiene	The adult diaper manufacturer raised ~₹ 170 Cr. in a fundraise led by Neo Asset Management
May’25	IDL Explosives	Apollo Micro Systems acquired 100% of the mining and infra explosive manufacturer for ~₹107 Cr.
May’25	August Electronics	Home grown EMS giant, Kaynes Electronics acquired the Canadian EMS company for an undisclosed sum
May’25	Euler Motors	Hero Moto & The CDC group invested ~₹ 640 Cr. in the EV OEM
May’25	Porter	The intra-city logistics solutions platform raised ~₹ 1,713 Cr. in a fundraise led by Vitruvian partners

Recent News

• In a boost to bilateral trade, India and the UK reached a Free Trade Agreement (FTA) which includes tariff elimination on 99% of Indian tariff lines and also reduces tariffs on 90% of UK tariff lines
• Following their trade talks in Geneva, America and China agreed to pull back from their trade war and slash tariffs, for 90 days at least,  also causing global markets to surge
• May’25 saw high volatility in the capital markets, following the Indo-Pak tensions; global security concerns – despite ceasefires – are driving renewed military spending and recalibrating defence budgets causing a resurgence of interest in defence companies
• India’s Manufacturing PMI saw a marginal increase from 58.0 in April, to 58.3 in May’25; A number over 50 signifies growth.
• Schaeffler launched its new facility in TN, India spanning 108,000 m² focussing on manufacture of power train components and chassis

IMAP Industrials Index & Valuation of sub-segments

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