Tenneco Clean Air India Ltd IPO – Mainboard
About the Company
Tenneco Clean Air India Ltd is a top maker of emission control and ride comfort systems for cars, trucks, and other vehicles. Founded in 2018, the company is a subsidiary of Tenneco Inc. (USA), a global leader in automotive parts. Tenneco Clean Air makes products that help reduce pollution from vehicles (like catalytic converters, mufflers, exhaust pipes) and also suspension parts that make cars ride smoothly. They supply to all big vehicle makers in India—from Maruti and Hyundai to Tata Motors and Ashok Leyland—and operate 12 factories across India.
What they do: Make pollution -control systems (called “clean air solutions”) and ride technology parts for trucks, cars, and off-highway vehicles to meet India’s BS-VI emission rules and global standards.
READ FULL DRHP HERE: |SEBI DRHP TENNECO CLEAN AIR|
IPO Details Table
| Detail | Explanation | Data |
|---|---|---|
| IPO Opening Date | Buy shares from | 12 Nov 2025 |
| IPO Closing Date | Last date to apply | 14 Nov 2025 |
| Price Band | Price range for shares | ₹378 – ₹397 |
| Lot Size | Min. shares to buy | 37 shares (~₹14,689) |
| Total Issue Size | Max money raised | ₹3,600 crore |
| Fresh Issue | New shares, money goes to company | ₹0 (100% OFS) |
| Offer for Sale (OFS) | Old owners sell shares, money goes to them | ₹3,600 crore (9.07 crore shares) |
| Shares in IPO | How many offered | 9.07 crore shares |
| Listing Date | Shares start trading | 19 Nov 2025 |
| Face Value | Company unit value | ₹10 per share |
| Registrar | Company handling share allocation | KFin CLICK HERE |
| Book-Running Lead Managers | IPO Managers | JM Financial, Citigroup Global Markets, Axis Bank, HSBC Securities |
What Will the IPO Money Be Used For?
Important: This is a 100% Offer for Sale (OFS), meaning:
- All ₹3,600 crore goes to existing shareholders (the parent company Tenneco Inc. selling part of its stake)
- The company will NOT get any fresh money from this IPO
- No new factories, no debt repayment, no expansion from IPO funds
IPO Timeline
| Event | Date |
|---|---|
| Anchor Bidding | 11 Nov 2025 |
| IPO Opens | 12 Nov 2025 |
| IPO Closes | 14 Nov 2025 (5 PM) |
| Allotment Date | 17 Nov 2025 |
| Refunds Issued | 18 Nov 2025 |
| Shares to Demat | 18 Nov 2025 |
| Listing Date | 19 Nov 2025 |
Business Model & Revenue Structure
What Tenneco Makes and Sells:
- Clean Air & Powertrain Solutions (57.5% of revenue in FY25):
- Products: Catalytic converters, diesel particulate filters (DPFs), mufflers, exhaust pipes, engine bearings, sealing systems
- Purpose: Reduce pollution from car/truck engines to meet BS-VI emission norms
- Customers: Maruti Suzuki, Hyundai, Tata Motors, Mahindra & Mahindra, Ashok Leyland, etc.
- Advanced Ride Technologies (42.5% of revenue in FY25):
- Products: Shock absorbers, struts, suspension systems
- Purpose: Make vehicles ride smoothly and comfortably
- Customers: Same major OEMs (original equipment manufacturers)
Revenue by Vehicle Type:
- Passenger Vehicles (PV): 64% of revenue
- Commercial Vehicles (CV): 22.8% of revenue
- Industrial/Others (2W, 3W, tractors): 13.2%
Revenue Model:
- Domestic Sales: 94% of revenue from India
- Exports: 6% of revenue (selling to other countries)
- Makes money by selling parts to vehicle makers on a contract basis—fixed prices per unit
Key Financial Metrics
| Metric | FY23 | FY24 | FY25 | What It Means |
|---|---|---|---|---|
| Revenue (Sales) | ₹4,827 Cr | ₹5,537 Cr | ₹4,931 Cr | Sales grew then dipped 11% in FY25 |
| Profit After Tax | ₹381 Cr | ₹417 Cr | ₹553 Cr | Profits up 33% despite lower sales |
| EBITDA | ₹571 Cr | ₹612 Cr | ₹815 Cr | Core business profit growing strongly |
| EBITDA Margin (%) | 11.8% | 11.2% | 16.7% | Margin jumped 550 basis points—big improvement |
| PAT Margin (%) | 7.9% | 7.6% | 11.3% | Each ₹100 sales gives ₹11 profit |
| ROE (%) | — | — | 42.65% | Very high shareholder returns |
| ROCE (%) | — | — | 56.78% | Excellent capital efficiency |
| Debt | ₹3.75 Cr | ₹3.75 Cr | ₹0.86 Cr | Nearly debt-free |
| Employee Cost | ~₹480 Cr (est) | ~₹520 Cr (est) | ~₹580 Cr (est) | About 12% of revenue |
| Net Worth | ₹1,379 Cr | ₹1,258 Cr | ₹1,811 Cr | Strong balance sheet |
Cost of Acquisition – For Promoters
- Tenneco Inc. (USA) owns 100% of Tenneco Clean Air India since inception in 2018
- The parent company built this subsidiary through internal investments and acquisitions of smaller Indian auto-part companies
- Original investment by promoters: Estimated at ₹300-500 crore over 2018-2020 period
- Current valuation at IPO: ₹16,023 crore (post-IPO market cap)
- Promoter Gain: 30-50x returns if they invested ₹300-500 crore initially and now valued at ₹16,000+ crore
Industry Overview – How Is the Auto Component Sector Growing?
Big Opportunity:
| Metric | Details |
|---|---|
| Auto Component Industry Size | ₹4.5–5 lakh crore in India (growing 8-10% yearly) |
| Emission Control Market | ₹50,000+ crore, growing rapidly due to BS-VI norms |
| Export Potential | India becoming global auto component hub |
| Growth Drivers | Stricter emission norms, SUV demand, hybrid vehicles, “Make in India” |
Tenneco’s Position:
- **#1 suppliero commercial truck OEMs with 57% market share
- Among top 2 suppliers to off-highway vehicles (tractors, construction equipment) with 42% share
- Among top 4 suppliers to passenger vehicle OEMs with 20% share
Growth & Strengths
Biggest Strengths:
- Market Leadership
- Largest in commercial truck emission control (60% share)
- Top-tier supplier to all major Indian OEMs
- Long-term contracts with blue-chip customers
- Improving Profitability
- Despite revenue dip, profits up 33% in FY25
- EBITDA margin expanded by 550 basis points
- ROE of 42.65% and ROCE of 56.78%—among highest in sector
- Debt-Free Balance Sheet
- Nearly zero debt (₹0.86 crore only)
- Strong cash flow generation
- Net cash positive company
- Global Technology Backing
- Parent Tenneco Inc. provides world-class R&D
- Access to latest emission control technologies
- Technology transfer from global operations
- Strategic Manufacturing
- 12 plants across 7 states
- Located near major OEM hubs
- Efficient supply chain and logistics
- Low Employee Costs
- Only 12% of revenue goes to salaries
- Highly automated manufacturing
- Good for future profit margins
- Regulatory Tailwinds
- BS-VI norms mandatory for all vehicles
- Future BS-VII standards will need even more emission control
- Government push for clean mobility
Key Risks & Concerns
Major Risks:
| Risk | Why It Matters | Impact |
|---|---|---|
| 100% OFS—No Fresh Money | Company gets zero funds for growth | Can’t expand or reduce debt from IPO proceeds |
| Customer Concentration | Top 10 customers = 81% of revenue | If one big customer leaves, major revenue loss |
| Auto Industry Cycles | 82% revenue from PV & CV sectors | Economic slowdown = lower vehicle sales = less parts needed |
| EV Transition Risk | Electric vehicles don’t need exhaust systems | Long-term threat to emission control business |
| Revenue Decline in FY25 | Sales dropped 11% from FY24 to FY25 | Shows vulnerability to market conditions |
| Regulatory Dependence | Business depends on emission norms | Delays in BS-VII or policy changes could hurt |
| No Volume Commitments | OEMs don’t guarantee purchase volumes | Revenue can fluctuate widely |
Valuation Analysis
| Metric | Tenneco Clean Air | Industry Average | Comment |
|---|---|---|---|
| P/E Ratio (Post-IPO) | 23.83x | 48x | Half the industry average—looks reasonable |
| P/E Ratio (Pre-IPO) | 28.97x | — | Moderate valuation |
| P/BV (Price to Book) | 12.77x | — | Premium to book value |
| Market Cap (Post-IPO) | ₹16,023 Cr | — | Large-cap company |
| EPS (FY25) | ₹13.71 | — | Good earnings per share |
- Not expensive compared to industry peers
- Valuation is fair given strong financials
- But 100% OFS means limited upside from IPO proceeds
IPO FAQS
What is an IPO?
- An IPO (Initial Public Offering) is when a private company sells its shares to the public for the first time to raise money.
- Example: If a well-known pizza company wants to grow, it can list its shares on the stock exchange so anyone can buy a piece of the company.
How can you apply for an IPO (using Zerodha or Upstox)?
- Make sure you have a Demat account and your bank account is linked.
- Steps:
- Log in to your broker’s app (e.g., Zerodha Kite, Upstox).
- Go to the IPO section.
- Select the company’s IPO you want to apply for.
- Enter how many shares (or ‘lots’) you want and the price you wish to bid.
- Enter your UPI ID, submit your application, and approve the UPI payment request.
How are IPO shares allotted?
- If more people want shares than are available, the company uses a lottery system to decide who gets them.
- If you don’t get shares, your money is simply returned.
What is GMP (Grey Market Premium)?
- GMP shows the extra price people are willing to pay for IPO shares before they officially start trading.
- Example: If IPO price is ₹100 and GMP is ₹20, people are unofficially ready to pay ₹120. It hints at the IPO’s popularity but isn’t a guarantee.
Where to check upcoming IPOs (IPO calendar)?
- Visit popular finance sites like Chittorgarh, IPOWatch, or official exchange websites (NSE, BSE) and look for the “Upcoming IPO” section.
What are IPO listing gains?
- If the share’s price rises on the first trading day, you can make instant profit.
- Example: You buy at ₹150, and it opens at ₹200, you gain ₹50 per share.
How can you make profit from an IPO?
- Quick gains on listing day (if the stock price goes up).
- Long-term: If the company grows, the share price could increase further.
Which IPO is best to buy?
- There is no single best IPO. Check the company’s background, current demand, and GMP, but always research before investing.
- High GMP or popularity doesn’t guarantee profits.
Are IPOs safe?
- IPOs can be profitable but also risky; prices can go up or down sharply.
- Only invest if you are ready for potential losses.
How to check IPO allotment status?
- After the IPO process, check on exchanges (BSE/NSE websites) or the IPO registrar’s site (like K-Fintech, Bigshare,or mufg-intime) by entering your PAN or application number to see if you got shares.
Important Tips for Retail Investors Applying for an IPO
- Use Only Your Own PAN Card:
Avoid using the same PAN card for multiple IPO applications. For example, if you have already applied using your PAN for one IPO, don’t try to apply again with the same PAN under different accounts or through others. - Apply in the Right Category:
Ensure you select the correct investor category (such as Retail Individual Investor) when filling out your application. Applying under a wrong category can lead to rejection or disqualification. - Maintain Sufficient Bank Balance:
Before applying, ensure your bank account linked to the application has enough funds to cover the full bid amount. For instance, if the IPO application requires a payment of ₹15000, make sure your account holds at least that amount. - Use Your Own Bank Account:
Always apply through your own bank account. Using someone else’s account can cause your application to be rejected during the verification process. - Avoid Last-Minute Applications:
Don’t wait until the deadline day or moments before to apply. Last-minute submissions may face technical glitches or processing delays, reducing the chances of success.