RSB Transmissions moves on a faster track
Automotive components maker RSB Transmissions (I) Ltd is gearing up to begin its next growth phase, aiming to increase its turnover from over Rs3,000 crore at present to around Rs10,000 crore in the next 4-5 years. Recently backed by the global private investment firm Bain Capital, the Pune-headquartered company – a leading manufacturer of propeller shafts, a wide range of axles, and gearboxes for commercial vehicles, passenger cars, construction, and farm equipment – has prepared a comprehensive roadmap to propel its future growth strategy.
The company, founded by the Behera family in 1973 as a small machining workshop in Jamshedpur, Jharkhand, recently entered the EV segment in partnership with Israel’s EVR Motors, designing and manufacturing EV components such as traction motors, e-axles, and controllers. In fact, the company is looking to increase the share of the EV segment in its revenue to around 25-30 per cent over the next 4-5 years.
“The collaboration with Bain Capital represents a significant milestone for RSB. We are excited to begin this new chapter of growth with Bain Capital as our strategic partner. We have built a solid foundation over the past five decades, and with our partner’s expertise and resources, we are confident in our ability to seize new opportunities and further strengthen our position as a global leader in our industry. We look forward to unlocking substantial growth, pursuing organic expansion plans as well as strategic mergers and acquisitions. Together, we are poised to drive innovation and enhance our capabilities for our customers worldwide in our next growth phase,” said RK Behera, 73, chairman of RSB Transmissions.
RSB, which celebrated its 50th anniversary last year, is looking to pursue an ambitious growth trajectory through a combination of organic and inorganic expansion plans. The company, a tier-1 supplier for global and Indian OEMs such as Tata Motors, Ashok Leyland, Daimler, Mahindra & Mahindra, and John Deere, as well as CAT, Tata Hitachi, JCB, LiuGong, Kobelco, and Komatsu in the construction and mining segment, is also planning to significantly expand its footprint in the export market.
In fact, RSB, which had also received funding from the International Finance Corporation (IFC, which has already exited), is expecting over 20 per cent of its revenue to accrue from the export market in the next 4-5 years. As part of its growth plan, the company aims to significantly expand its footprint in Mexico and the US, where it already has manufacturing facilities. Apart from organic expansion, RSB is evaluating strategic acquisitions in both geographies to boost its overall footprint.
Backed by 6,000 employees across 17 manufacturing facilities in India, two overseas facilities – one each in Mexico and the US – as well as a modern R&D centre (I-DESIGN Engineering Solutions Ltd) in Pune, RSB, now with Bain Capital’s funding and domain expertise, is also exploring opportunities in railways, defence, and telecom to reduce its dependency on cyclical vehicle demand. The company is also venturing into agricultural equipment and highway products.
RSB is eyeing growth in the railway sector by leveraging its competency in heavy fabrication, ie heavy sheet metal welding, and diversifying into defence with armoured vehicle components.
While the current focus on commercial vehicles and construction equipment continues, the company is also planning to expand its portfolio in the passenger car market as part of its overall growth strategy. This includes plans to launch an IPO within the next 5-6 years.
The Medium and Heavy Commercial Vehicle (MHCV) segment remains RSB’s highest revenue-generating division, with ongoing investments in in-house suspension systems and drivetrain components to support this segment. The commercial vehicle sector accounts for around 65 per cent of the automotive component segment, which contributes approximately 75 per cent to the overall revenue.
“As we commence our journey 2.0, Bain Capital’s deep industry knowledge and global network will be invaluable. The partnership will provide RSB with financial and strategic support to fuel growth initiatives and global expansion. We are working together to explore new markets, drive innovation, and continue delivering exceptional value to our customers,” adds SK Behera, 67, Vice Chairman and Managing Director of RSB, who is the younger brother of RK Behera. Both brothers have built the organisation from a very humble beginning.
“For over five decades, the Beheras have built RSB into a truly differentiated, high-quality company at the forefront of the global automotive engineering industry. RSB’s strong culture, relentless focus on high-quality engineering, long-term customer relationships, impressive track record, and robust global footprint make it an extraordinary company,” states Pawan Singh, Partner, Bain Capital.
The Bain collaboration
“We believe the auto components industry and the company are at an inflection point. We are collaborating closely with the Behera family and are committed to building a larger, more diversified platform,” says Rishi Mandawat, Partner at Bain Capital, which acquired a 30 per cent stake in RSB last year. Apart from funding, Bain also acts as a strategic partner for RSB by providing domain expertise to chart the company’s 2.0 growth journey. Axis Capital, KPMG, Kirkland & Ellis, Khaitan & Co, McKinsey, ERM, and Alvarez & Marsal served as advisors to Bain Capital in forming this partnership.
RSB is the story of how the Behera brothers, amidst a challenging scenario, transformed a small machining workshop into a leading automotive components maker through their perseverance and resilience. After earning his mechanical engineering degree from NIT Jamshedpur in 1972, RK Behera aspired to set up his own business against the wishes of his father, who wanted him to take a job at TISCO (now Tata Steel), Jamshedpur, where the latter was employed.
In 1973, Behera, along with his younger brother SK, established a small machining workshop (named International Auto Products; in 1989, the company was rechristened to its present name) in Jamshedpur with seed capital of around Rs2 lakh. The initial years were quite difficult as they managed to secure only smaller maintenance jobs from companies like TISCO and the Uranium Corporation of India. However, their persistence paid off when, in 1980, they secured a game-changing contract from Tata Motors (then Telco) for sheet metal machining. The next decade and a half until the mid-1990s saw RK’s unwavering focus on quality – evident in his championing of rigorous quality control measures – coupled with SK’s leadership in production, laying the foundation for the company’s success story.
The 1990s were transformative for RSB. The company diversified its product line to include components such as propeller shafts, axles, gearboxes, and other automotive parts for various vehicles, established multiple manufacturing locations, and set up a dedicated gear manufacturing facility in Pune at Tata Motors’ invitation in 1996. During the 2000s, RSB expanded its product portfolio and added plants in India, the USA, and Mexico through strategic acquisitions and greenfield projects. This diversification helped mitigate risks across different sectors.
In 1990, the company set up its first manufacturing facility for propeller shafts in Jamshedpur; the plant primarily supplied Tata Motors. In 1996, the company shifted its headquarters to Pune, where it also set up a plant manufacturing finished gears, shafts, and aluminium machining products. In 1999, it diversified into the CMI segment, making heavy fabricated components such as booms, arms, backhoe loaders, and buckets in Jamshedpur. This was followed by a plant in 2006 in Jamshedpur for fifth-wheel couplings and lift axles, and another plant in Jamshedpur in 2009 for rear axles, dummy axles, and lift axles.
Today, RSB has emerged as a global organisation with a presence in India, Mexico, and the US. From having just 15 employees in 1973, the company now has a large workforce of over 6,000 employees. It operates 17 manufacturing plants across eight locations in India, along with additional facilities in the USA and Mexico. In India, the company has five plants in Jamshedpur, two each in Pune and Sri City in Andhra Pradesh, and one facility each in Pantnagar, Chennai, Lucknow, Dharwad in Karnataka, and Cheyyar in Tamil Nadu. Additionally, the company has forging and casting facilities in Odisha.
In recognition of its excellence, RSB received the prestigious Deming Prize in 2013 from the Union of Japanese Scientists & Engineers (JUSE) in Tokyo, Japan – one of the few Indian automotive companies to achieve this distinction for outstanding quality and service standards. Furthering its reputation for operational excellence, four RSB plants in Jamshedpur were awarded the TPM (Total Productive Maintenance) Excellence Award, Category A, in 2019 by the Japan Institute of Plant Maintenance (JIPM).
“Looking back on 50 years of RSB, I am deeply grateful for the journey we have taken. This is not just about marking a milestone; it’s a tribute to the humble beginning, to the dedication and shared values that have brought us here. This journey wasn’t one I took alone; it was built alongside my brother, SK Behera, whose support and determination carried us through our most challenging times. In the beginning, we faced intense struggles, limited resources, financial setbacks, and constant hurdles, but with SK by my side and the unyielding spirit of our employees, we persisted. Every success is truly a testament to the sacrifices, resilience, and dedication of our RSB Parivar. As we look forward, I urge our next generation to hold fast to these values of integrity, quality, and respect. They are also expected to have a strong focus on sustainability. Together, we have not only achieved growth but also built a legacy that we can proudly pass on, impacting our communities and industry for years to come,” states the RSB chairman.
“Our journey from a small workshop to an industry leader with a Rs3,000+ crore revenue base has been one of resilience, strategic vision, and a focus on excellence. From the earliest days, we were guided by the belief that taking care of our people would allow us to achieve remarkable things. Every milestone reflects the hard work, talents, and sacrifices of our employees, whose dedication and commitment have driven RSB forward. As we now embrace new opportunities – from electric vehicle technology to expanding into international markets – our focus remains on building with integrity and quality. Looking to the future, we will continue setting new industry standards, not just for growth, but for creating lasting value and impact in every market we enter,” adds SK Behera.
Cutting-edge facilities
Over the years, the company has diversified itself both in terms of customers and products. While Tata Motors and Ashok Leyland continue to be its largest customers, the company has significantly diversified its clientele to include several Indian and global OEMs across the automotive and CMI segments. With cutting-edge facilities and the latest IT infrastructure, RSB is recognised for its top-tier manufacturing capabilities, strategic customer relationships, and commitment to quality, enabling it to serve as a supplier of choice to OEMs.
RSB is today a leading global manufacturer of propeller shafts and a wide range of axles, including front axles, trailer axles, tractor axles, dummy axles, and axle beams. It also manufactures gearboxes for small commercial vehicles and fully finished gears, shafts, hubs, and sleeves. Its backward integration facility for castings and forgings ensures the quality control of essential components. In the CMI (Construction and Mining Infrastructure) segment, RSB is a major manufacturer of heavy fabrications and aggregates, including frames, arms, booms, and buckets for excavators, backhoe loaders, and front-end loaders.
In order to support its massive manufacturing infrastructure, RSB has a separate technology/R&D subsidiary, I-Design Engineering Solutions Ltd. Backed by 100-odd engineers and technocrats, the Pune-based R&D subsidiary, set up in 2002, spearheads the company’s innovation efforts, handling comprehensive product design, development, validation, testing, and value engineering. It not only provides R&D services to the group companies but also extends such services to external automotive and engineering companies. The company has invested over Rs80 crore in this facility, which is now also focusing on EV product development, including motors and axles. It has already developed a reducer gearbox for EVs, which the company has now also started manufacturing.
Apart from having its own R&D base, the company has also been collaborating with global players to enrich its innovative offerings. It entered into a technical collaboration with Eugen Klein GmbH, Germany, in 2004 for manufacturing propeller shafts. In 2021, RSB tied up with Reyco Granning, USA, for designing, developing, and supplying best-in-class air and mechanical suspension systems for trucks, buses, and special applications. More recently, in 2013, the company collaborated with EVR Motors of Israel to develop electric motors, focusing on e-axles, motors, and controller technologies for LCVs in the EV segment. RSB has ambitious plans to explore emerging opportunities in the rapidly growing EV segment. In the next 4-5 years, the company expects the EV share in its total revenue to grow to around 25-30 per cent.
India’s EV market is anticipated to expand at a CAGR of 28.52 per cent, reaching $18.32 billion by 2029, up from $5.22 billion in 2024. The domestic EV sector is experiencing rapid growth, driven by government incentives, rising environmental concerns, and technological advancements. With initiatives such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, India aims to significantly increase EV adoption, transforming its transportation landscape towards sustainability and innovation.
India has set a target to elevate the proportion of EV sales to 30 per cent in private cars, 70 per cent in commercial vehicles, 40 per cent in buses, and 80 per cent in two-wheelers and three-wheelers by 2030. This ambitious objective equates to 80 million EVs on Indian roads by 2030. Furthermore, India aspires to achieve complete domestic EV production through the ‘Make in India’ initiative.
While India remains RSB’s primary market, the company is expanding its footprint in overseas markets such as Mexico and the US. RSB entered the international market in 2006 when it acquired Miller Brothers Manufacturing – a privately-held automotive components and products manufacturing company based in Michigan, USA, near Detroit. This entity has been converted into RSB’s subsidiary, RSB Transmissions NA, Inc.
RSB Transmissions NA, Inc manufactures high-quality precision machined parts and assemblies to cater to the requirements of various industry sectors. The facility, located in Homer, Michigan, spans 108,000 sq ft, with adequate land for future expansion, and employs over 150 people. The company has become synonymous with precision machining, fabrication, and assembly.
Mexican foray
RSB further expanded its global presence by establishing a greenfield project in Mexico in 2011. RSB Transmissions De Mexico, based in Silao, Guanajuato, Mexico, operates as part of RSB Transmissions NA, Inc. It specialises in manufacturing specialty transmission components, serving the Latin American market. It supplies to prominent clients such as American Axles, DANA, Eaton, and Magna.
Meanwhile, a McKinsey report commissioned by the Automotive Component Manufacturers Association highlights that the Indian automotive components industry is poised for substantial growth and advancements. This growth is fuelled by India’s strategic position in global supply chains, rising demand for premium automotive features, and alternative powertrain technologies. Together, these factors could increase the industry’s market size to $200 billion by 2030, growing at a CAGR of 16 per cent from $74 billion in 2024, with the majority of growth driven by exports.
While the domestic market will continue to be a significant contributor to India’s auto component industry over the next decade, exports are projected to grow five-fold to $100 billion. Domestic OEM sales and aftermarket sales are anticipated to grow at a CAGR of 6 per cent, reaching $89 billion and $16 billion, respectively. This growth positions component exports as the largest segment by 2030, empowering the industry to attain self-reliance and establish itself as a global hub for future mobility solutions.
Amidst these developments, RSB has positioned itself strongly to capitalise on opportunities in the growing marketplace. By entering into a strategic partnership with Bain Capital, the company has outlined a comprehensive plan to embark on its next phase of growth. This multi-pronged strategy aims to achieve over threefold growth in revenue within the next four to five years. It includes venturing into the rapidly expanding EV components market in partnership with Israel’s EVR Motors. RSB is preparing to cater to the EV market by establishing manufacturing and R&D infrastructure and expects EV components to contribute 25-30 per cent of its overall revenue in the coming years.
Additionally, the company, which has primarily focused on the domestic market, is now striving to significantly increase its exports by strengthening its presence in Mexico and the US. Over the years, RSB has also expanded its presence in the CMI segment, which now accounts for 25 per cent of its business. Within the automotive segment, RSB is diversifying its offerings by adding more products. These efforts will help the company build a more diversified client and product base, ultimately creating a robust and resilient business model.