Italian firm to buy Nashik-based Right Tight Fasteners (RTF)

Italy’s Fontana Gruppo is buying a majority stake in Nashik-based Right Tight Fasteners (RTF) in a deal that is expected to help it make inroads into the Asian market, The Economic Times reported.

Fontana is investing close to ₹ 1,000 crore for a 60% stake in the auto gear maker, the report said, citing an unidentified person aware of the development.

Under the two-part structured deal, RTF will acquire Fontana Gruppo’s existing operations in India, BG Fastening, after which the Italian firm will buy 60% of the combined entity, the report said.

RTF is a supplier of nuts, bolts, and screws to Tata Motors Ltd, Mahindra and Mahindra Ltd, Ashok Leyland Ltd, Bajaj Auto Ltd, Royal Enfield, and Ola Electric.

The proceeds from the transactions will be used to fuel RTF’s growth plans and expansion in the Indian market, the report said, adding that the Nashik-based firm plans to scale up its international presence by leveraging this partnership with Fontana Gruppo.

RTF, which boasts five plants, 2,700 employees, over 20 R&D engineers, ships 56 million fasteners per day.

According to CareEdge, RTF’s annual revenue improved to ₹600.65 crore in FY23 from ₹429.34 crore the previous year, backed by improved demand in the automobile industry.

With an established track record in the auto ancillary industry, RTF was formed by Balbir Singh Chhabra in 1979.

In about four decades, RTF has emerged as a precision cold-forged high-tensile fasteners manufacturer, manufacturing about 7,000 variants of fasteners of different sizes and ranges and supplying various established original equipment manufacturers.

RTF is deploying capex to set up a forging facility near its existing Pant Nagar unit in Uttarakhand, with a capacity of 5,000 metric tons per annum.

The about ₹105 crore project is being funded by a term loan of ₹75 crore and the rest through internal accruals.

The project is in advanced stages, with the CareEdge report pointing out that current target date of commencement of operations is end Q1FY25.