Tenneco Clean Air India IPO 2025: Key Details, Strengths & Risks

November 12, 2025 Kiran

Tenneco Clean Air India Ltd. is launching its initial public offering (IPO) from 12 November 2025 to 14 November 2025, seeking to raise approximately ₹3,600 crore through a 100 % Offer-for-Sale (OFS) of around 9.07 crore equity shares. The company is a subsidiary of the US-based Tenneco Group, active in automotive clean-air and suspension solutions for both India and exports.

The price band is set at ₹378 to ₹397 per share, and the lot size for retail investors is 37 shares, implying a minimum investment of about ₹14,689 at the upper end of the band. Listing is scheduled on both NSE and BSE on 19 November 2025 (tentative).

Business Overview & Competitive Position

Tenneco Clean Air India operates across two major product tracks:

Clean-air & powertrain solutions such as exhaust after-treatment systems (catalytic converters, diesel particulate filters) and related engine components.
Advanced ride-technologies including shock absorbers, suspension systems and struts tailored for passenger vehicles, commercial vehicles and off-highway applications.

The company claims leadership positions: for example, it holds ~57 % share in clean-air solutions for commercial trucks, ~68 % for off-highway vehicles and ~52 % for shock absorber and strut solutions in passenger-vehicle OEMs. It operates multiple manufacturing plants across India, benefits from its parent’s global R&D and patents, and serves both domestic and export OEMs.

Financial & Valuation Highlights

Financially, it reported:

For FY2025: Net profit (PAT) climbed to ~₹552 crore from ~₹417 crore a year earlier (~20 % CAGR).
Revenue, however, saw modest growth (~0.7 % over two years) or declined in some years due to cyclical pressures in the auto sector.
Strong return ratios: ROE around ~42 %, ROCE over ~50 % in recent years.
At the upper price band (₹397), the IPO values the company at about 28–29x FY25 earnings (P/E) and around ~10x book value (P/B). These appear relatively moderate compared to some peer valuations which trade at higher P/E and P/B multiples.

Subscription & Market Sentiment

The IPO received strong signalling from anchor investors, raising over ₹1,000 crore in anchor allocations on the eve of the public issue. The company is also seeing a healthy grey market premium (GMP), indicating positive sentiment — figures suggest a premium of ~₹60–₹61 per share (about 15 % above the issue price) in the grey market.

However, on Day 1 of the subscription, the issue is only partially subscribed (around 0.4–0.5 times as per early data), showing mixed traction among retail and institutional investors.

Strengths That Stand Out

Market leadership in multiple niche segments (clean-air solutions, suspensions) with strong OEM relationships and global parent backing.
High profitability and disciplined capital management: net-debt free or low-debt status, improving margins and operational efficiency.
Tailwinds from regulatory landscape: stricter emission norms in India, growing premium vehicle segment, export demand — all favouring the business.

Key Risks to Consider

The IPO is entirely an OFS — meaning no fresh capital is raised for growth, expansion or debt reduction. Investors will not see immediate reinvestment benefits from the IPO proceeds.
Revenue growth has been modest or even flat in recent years, exposing cyclicality risk in the auto-component business. A slowdown in OEM demand or delayed vehicle launches could hurt the company.
Customer-concentration risk: A significant portion of revenue comes from top-10 OEM customers. Losing or scaling back business from any major customer can materially impact results.
Transition risk towards electrification: As EV penetration increases, the traditional clean-air (emission control) business may shrink over time — though the company has ride-tech capabilities that might offset this.
Valuation sensitivity: Although valuations appear reasonable compared to some peers, they still assume sustained growth and margin improvement — any slip could affect returns.

Who Should Consider This IPO?

This IPO may appeal to investors who:

Seek exposure to auto-component manufacturing with niche technological leadership and export orientation.
Have a long-term investment horizon, willing to ride through cyclical ups and downs in the automobile sector.
Are comfortable with moderately high valuations and understand sector-specific risks (auto cycle, emission norms, EV transition).

Retail investors with short-term return expectations may need to weigh the risk-reward carefully, given that subscription is modest and listing gains may be limited if growth disappoints.

Final Verdict

The Tenneco Clean Air India IPO presents a compelling blend of leadership in a technical niche, strong parent backing and thematic tailwinds from stricter emission norms and premium vehicle growth. While the valuations are not excessive relative to fundamentals, they do reflect optimism about future growth and margin expansion.

For investors focused on quality auto-components businesses, this IPO merits consideration — provided one is comfortable with the risks and can commit for the medium to long term. For more cautious or short-horizon investors, a wait-and-watch approach may be prudent.