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08 Aug, 2025
Tenneco Clean Air India Limited, a leading supplier of automotive components and a subsidiary of the US-based Tenneco Group, has formally submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) to launch an initial public offering (IPO) of up to 3,000 crore. The IPO will be purely an Offer for Sale (OFS) by its promoter, Tenneco Mauritius Holdings Limited, which means no new equity shares will be issued and the company will get nothing from the proceeds. Rather, the selling shareholder will receive all funds raised.
The IPO will be a 100 percent book-built Offer for Sale as per SEBI guidelines. The equity shares will be listed in the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Tenneco Mauritius Holdings will sell some of its 344.81 million shares, offering the promoter a partial exit. The post-issue capital will be the same as the pre-issue capital, 403.6 million equity shares, since this is not a fresh issue.
The offer allocation is likely to be distributed with not more than half to Qualified Institutional Buyers (QIB), up to 60 percent of the QIB portion to Anchor Investors, at least 15 percent to Non-Institutional Investors (NII) and at least 35 percent to Retail Individual Investors (RII). Also, 5% of the net QIB portion will be allocated to the mutual funds.
Tenneco Clean Air India is a market leader in the Indian automotive components industry with 12 manufacturing plants in India. The company is a specialist in clean air, powertrain and suspension solutions. During the financial year 2025, it had 119 customers, all the top seven passenger vehicle original equipment manufacturers (OEMs) in India and the top five commercial truck OEMs.
The company has a 60 percent market share as the biggest supplier of clean air systems to Indian commercial truck manufacturers and is one of the two biggest suppliers to off-highway vehicle OEMs, excluding tractors, with a 42 percent share. It also has an impact on industrial use and the aftermarket, mainly with Motocare India, a subsidiary of Tenneco LLC.
Tenneco Clean Air India has been recording high profitability over the past years. The profit after tax (PAT) of the company has increased by 32.7 percent to 553 crore in FY25, although the revenue generated through operations has been reduced by 10.6 percent to 4890 crore in FY25 as compared to FY24. EBITDA margin of the company also increased significantly, indicating greater efficiency in operations. In the last three years, the revenue increased to 48,274 million in FY23, 54,676 million in FY24 and 48,904 million in FY25. EBITDA has grown to 8,152 million in FY25 compared to 5,706 million in FY23 and PAT has grown to 5,531 million in FY25 compared to 3,810 million in FY23. The fundamental earnings per share also increased, rising to 7.58 in FY23 and 13.68 in FY25.
Some of the competitors of Tenneco Clean Air India in the Indian auto components market are Bosch, Timken India, SKF India, ZF Commercial Vehicle Control System India, Sharda Motor Industries, Gabriel India, Uno Minda and Sona BLW Precision Forgings. Its technology-based solutions and wide manufacturing presence have assisted the company in sustaining a leadership position, particularly in commercial vehicle clean air systems.
The main aim of the IPO is to have the listing advantage and offer an exit to the promoter. As the problem is a pure OFS, Tenneco Clean Air India will not be given any amount of money to expand the business or pay off the debt. Rather, the listing is likely to increase the company's visibility, brand value and the standards of corporate governance that will make the company a future growth opportunity.
The proposed 3,000 crore IPO of Tenneco Clean Air India is a major milestone in the history of the company and the auto components industry of India. With the company set to make its debut on the stock market, investors and other observers in the industry will be keen on its performance, competitive strategy and how the listing will affect its future growth.
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