Tenneco Clean Air plans to launch a massive ₹3,600 crore IPO on November 12, 2025. The global Tier I automotive component supplier shows strong financial performance with a market cap of ₹16,023 crore. Their numbers look solid with a 57.3% return on capital employed (ROCE) and 42.6% return on equity (ROE).
The IPO gives investors a great chance to buy into a market leader. Tenneco Clean Air India Pvt Ltd dominates the market with a 52% share in shock absorbers & struts for Indian passenger vehicle OEMs. They hold an even stronger 57% share in Clean Air Solutions for Indian Commercial Trucks OEMs. But investors should know that this is just an offer to sell 9.07 crore shares – the company won’t get any direct proceeds.
This piece takes a deep look at the Tenneco Clean Air IPO. We’ll break down everything from subscription details to the price band of ₹378 to ₹397 per share. You’ll learn about their business basics and what experts say about this automotive component giant. This will help you decide if it belongs in your investment portfolio.
Tenneco Clean Air IPO Snapshot
Tenneco Clean Air plans a significant market debut with its upcoming IPO. Let’s take a closer look at what this offering brings to the table.
Issue size and offer type
The Tenneco Clean Air IPO features a pure offer for sale (OFS) of 9.07 crore equity shares worth ₹3,600 crore. Since this is an OFS structure, Tenneco Clean Air won’t receive any proceeds from the offering. The selling shareholders will get all funds after deducting offer expenses. Global promoters Tenneco Inc., Federal-Mogul, and Mauritius Holdings see this IPO as a chance to reduce their stake and tap into value.
Price band and valuation
The company has priced its shares between ₹378-₹397 with a face value of ₹10 per share. The company’s market capitalization could reach ₹16,000 crore at the upper price band. Each lot contains 37 shares, which means investors need to put in at least ₹14,689 at the upper price band. Retail investors can buy up to 13 lots (481 shares) worth ₹190,957.
Subscription categories and reservation
The IPO follows this allocation pattern:
- Qualified Institutional Buyers (QIB): Not more than 50% of the offer
- Non-Institutional Investors (NII): Not less than 15% of the offer
- Retail Individual Investors: Not less than 35% of the offer
Small NII covers bids between ₹2-10 lakhs while Big NII includes bids above ₹10 lakhs.
GMP trends and expected returns
The Grey Market Premium (GMP) for Tenneco Clean Air shows promise. The GMP reached ₹55-65 on November 11, 2025, suggesting a potential listing premium of 13.85-16.37% above the upper price band. Recent GMP movements started at ₹100 on November 6 and settled around ₹55-67 by November 10-11. These trends point to possible listing gains, though the GMP has dropped by about 25% since November 7.
Business Model and Market Position
Tenneco’s success stems from its diverse business model that spans multiple automotive technology segments. Let’s get into what makes this company a revolutionary force in the automotive components industry.
Overview of clean air and powertrain solutions
Clean Air business serves as the life-blood of Tenneco’s operations and focuses on three key technological areas: aftertreatment, energy recycling, and acoustic engineering. Their emissions control systems help global engine manufacturers meet stringent regulations like Euro 6d, Euro 7, China 6, and Bharat 6. The company commands a 57% market share in Clean Air Solutions for Indian Commercial Truck OEMs. Their Powertrain division strengthens this position with high-precision engine components that improve combustion efficiency and durability.
Advanced ride technologies and product innovation
Tenneco delivers groundbreaking solutions through Monroe Ride Solutions in the suspension technology space. Their flagship CVSAe technology features electronic dampers that adapt continuously to road conditions. Drivers can select Comfort, Standard, or Sport settings. Their CVSA2/Kinetic suspension system represents another breakthrough that delivers superior handling for heavier vehicles without conventional roll bars. The company’s Systems Protection business has created specialized products like FyreJacket™ 1650 and Protexx-Shield™ 7005 that provide thermal runaway protection for electric vehicles.
OEM relationships and export footprint
Strong partnerships with global automotive giants like Toyota, Honda, Nissan, GM, Ford, Volkswagen, and Tata Motors define Tenneco’s market presence. The company serves 119 customers as of March 2025. Their top 10 clients have maintained relationships averaging over 19 years. Production contracts typically last throughout the entire lifecycle of related vehicles.
Revenue mix by segment and geography
Clean Air & Powertrain Solutions generate 57.5% of total operations, while Advanced Ride Technologies bring in 42.5%. Passenger Vehicles lead the revenue mix at 64%, followed by Commercial Vehicles at 22.8%. Industrial/others contribute 6.1%, and Aftermarket sales account for 5%. The company earns 94% of revenue from domestic sales, while exports make up the remaining 6%.
Financial Health and Key Indicators
Tenneco Clean Air India’s financial performance shows remarkable efficiency gains and steady improvements in critical metrics.
Top-line and bottom-line growth
Revenue moved from ₹4,827 crore in FY23 to ₹5,468 crore in FY24 before settling at ₹4,890 crore in FY25. The company’s profits kept climbing steadily. Profit After Tax grew from ₹381 crore in FY23 to ₹553 crore in FY25, with a strong CAGR of 20.48%. The company’s Q1FY26 results were positive as PAT increased by 11.8% year-on-year to ₹168.09 crore.
EBITDA margin and value-added revenue
The company streamlined its operations significantly. EBITDA margins rose from 11.82% in FY23 to 16.67% in FY25. The EBITDA margin reached 18.61% in FY25 based on Value-Added Revenue calculations. The company achieved this margin growth by optimizing raw material costs and improving operational efficiency.
Balance sheet strength and net cash position
A resilient financial position marks Tenneco’s performance with zero debt and strong liquidity. The company’s net cash stood at ₹2,662 million in FY25. Its Net Debt/EBITDA ratio of -0.33× reflects a debt-free status.
Working capital and asset utilization
The company stands out with industry-leading returns on capital investment. ROCE hit 56.78% in FY25, while ROE reached 42.65%. The cash conversion cycle improved from -10 days in FY23 to -24 days in FY25. These numbers show the company’s excellent working capital management.
Should You Invest in Tenneco India IPO?
You need to weigh several key factors to decide if investing in Tenneco Clean Air India makes sense.
Strengths and competitive advantages
Tenneco leads the automotive components sector with impressive numbers. The company holds a 57% market share in clean air solutions for commercial vehicles and 52% share in shock absorbers for passenger vehicles. Their zero debt and net cash position show exceptional financial stability. The negative working capital model (-24 days cash cycle) keeps bringing in steady cash flow. The company’s return on capital stands at 56.78%, making it one of India’s most efficient manufacturing companies.
Valuation vs peers
The upper price band of ₹397 puts Tenneco at roughly 29x FY25 earnings, or about 24x based on Q1 FY26 earnings. These numbers look reasonable compared to competitors like Bosch (49.0x), Timken (49.9x), ZF Commercial (50.4x), and Uno Minda (64.9x). All the same, it costs more than SKF India (19.6x) and Sharda Motor (20.1x), which reflects Tenneco’s better returns.
Expert reviews and broker recommendations
Analysts remain cautiously optimistic. ICICI Direct gave a “Subscribe” rating because of “reliable business fundamentals, healthy 30%+ return ratios profile and reasonable valuations”. On the other hand, analyst Dilip Davda rated it “Neutral”, suggesting modest expectations. The Grey market premium of 15.1% shows positive market sentiment before listing.
Who should think about applying?
This IPO fits investors who want to tap into India’s clean mobility sector for the long haul. It makes sense for those who value double-digit ROE, lean working capital, and growing margins. But careful investors should watch out for risks like high customer concentration (top 10 clients make up 80.57% of revenue) and possible EV transition challenges. The IPO works best for investors with medium-to-long term goals.
Conclusion
Tenneco Clean Air IPO makes a strong investment case with its market leadership and outstanding financial performance. The company dominates the market with a 52% share in passenger vehicle shock absorbers and 57% share in commercial truck clean air solutions. Its financial strength shines through industry-leading figures – a 57.3% ROCE and 42.6% ROE that show exceptional capital efficiency.
Notwithstanding that, investors should know this IPO is purely an offer for sale, so the company won’t receive any direct proceeds. The price band of ₹378-₹397 puts Tenneco at roughly 29x FY25 earnings – a reasonable valuation compared to most peers but somewhat premium to some competitors.
On top of that, the Grey Market Premium shows 15-16% potential listing gains, reflecting positive market sentiment despite dropping from earlier levels. The company’s negative working capital cycle and zero-debt status definitely make it an attractive option for investors seeking financially stable opportunities.
Tenneco Clean Air IPO suits investors who want exposure to India’s clean mobility sector and have medium to long-term investment horizons. The company’s decades-old OEM relationships provide stability while its technological edge offers room for growth. Risk-averse investors should think over the high customer concentration risk.
Strong fundamentals, market leadership, and fair valuation make Tenneco Clean Air IPO worth serious attention for investors looking to vary their portfolio with quality manufacturing stocks. This offering stands out thanks to its mix of profitability, efficiency, and growth potential, even with some inherent risks.
FAQs
The price band for the Tenneco Clean Air IPO is set at ₹378 to ₹397 per share.
Tenneco Clean Air holds a 52% market share in shock absorbers & struts for Indian passenger vehicle OEMs and a 57% market share in Clean Air Solutions for Indian Commercial Trucks OEMs.
Tenneco Clean Air boasts impressive financial metrics, including a return on capital employed (ROCE) of 57.3% and a return on equity (ROE) of 42.6%.
Yes, Tenneco Clean Air maintains a robust financial position with zero leverage and a net cash position of ₹2,662 million in FY25.
The Tenneco Clean Air IPO is suitable for investors seeking exposure to India’s clean mobility sector with a long-term horizon, and those who value companies with double-digit ROE, lean working capital, and expanding margins.
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