This paper presents the method of designing an optimized light weight, cost effective planetary gearbox for a Formula Student vehicle. The gearbox has a high speed functioning capability, in addition to the compact size and light weight. The iterative optimization procedure used provides a technique for selecting the best possible configuration of the gearbox. Conventional gearboxes used for this purpose are generally two step reduction gearboxes, which are bulkier in terms of weight and volume. Also, a review of the existing market reveals that the planetary gearboxes manufactured in India are not capable of handling high speeds, thus rendering them futile for racing applications.The target reduction ratio for the gearbox is a fixed parameter. The method involves design and optimization of the gear-train with the calculated ratio. A detailed algorithm has been used, which involves developing a mathematically modelled code for deciding gear characteristics, physical modelling using CAD, and structural testing of the same through simulation, with repeated iterations with a target to reduce both weight and volume. The program used has been modelled on the theoretical data acquired through perusal of available literature. The selection of bearings have been made after calculating the forces acting on the bearings, followed by market research to select bearings with the requisite load capability. The shafts for the gears have also been designed according to force calculations, followed by structural analysis. The casing for the gears is constructed around the gear-train for efficient packaging and validated through static structural simulation. A preliminary thermal analysis has been completed to verify the design according to thermal considerations. The result of the same has been presented.