Tenneco Clean Air IPO Review: Apply or Avoid?
Hello, IPO Ji family!
The mainboard IPOs just keep rolling in! This week, we have a global auto-ancillary giant, Tenneco Clean Air India, opening its ₹3,600 crore issue.
This isn't a new-age startup. This is a core B2B company that makes the high-tech parts (like exhaust and suspension systems) for nearly every auto brand you can name—Maruti Suzuki, Tata Motors, M&M, Ashok Leyland, and many more.
But here's the big catch: This is a 100% Offer for Sale (OFS). The company isn't raising a single rupee for itself.
So, is this a chance to buy into a profitable, debt-free market leader at a fair price? Or is it just the US-based promoter cashing out? As always, IPO Ji has done the deep dive. Let's get into the data.
Tenneco Clean Air IPO: Key Details
First, let's get the dates and numbers locked in.
Tenneco IPO GMP (Grey Market Premium)
This is the number everyone is watching, and it's looking strong.
About the Company: The "Picks & Shovels" of the Auto Boom
Tenneco isn't a brand you see on a car, but it's inside almost all of them. It's a critical supplier of:
- Clean Air Solutions: Catalytic converters, diesel particulate filters (DPFs), mufflers, and exhaust pipes that help cars meet strict BS-VI emission norms.
- Advanced Ride Tech: Shock absorbers, struts, and advanced suspension systems.
- Powertrain Solutions: Engine components.
They are a market leader with 12 manufacturing plants in India, and their client list is a "who's who" of the auto industry (Maruti, Tata, Hyundai, M&M, Toyota, etc.).
Financial Deep Dive: The Profit & Margin Story
This is the most important part of our analysis. The numbers tell a very interesting story.
(Amount in ₹ Crore)
Analysis of the Financials:
- Profit is Booming (Up 33%): Don't be fooled by the 11% dip in revenue in FY25. Look at the Profit After Tax (PAT). It jumped by a massive 33% to ₹553 crores.
- It's an "Efficiency" Story: How does profit go up when revenue goes down? Margin Expansion. The company got more profitable by cutting raw material costs and other expenses. Its PAT Margin improved to 11.31%. This is a sign of a strong, well-managed business.
- Excellent Return Ratios: For FY25, the company reported a Return on Equity (ROE) of 42.65% and a Return on Capital Employed (ROCE) of 56.78%. These are outstanding, world-class numbers.
The Elephant in the Room: It’s a 100% Offer for Sale (OFS)
This is the one big catch. The company is not raising any new money. The entire ₹3,600 crore issue is the promoter (Tenneco Mauritius) selling its shares.
- Why are they selling? The promoter holds 97.25% and needs to sell shares to meet SEBI's rule of having a 25% minimum public shareholding.
- What does this mean? The money is not going into the company for growth, expansion, or R&D. It's going directly to the parent company
Valuation: Is the Price Fair?
Let's look at the P/E (Price-to-Earnings) ratio.
- Based on FY25 EPS (₹13.71), the IPO is priced at a P/E of ~29x.
- Based on annualized Q1 FY26 EPS (₹16.66), the forward P/E is ~24x.
For a market-leading, debt-free auto-ancillary company with a 56% ROCE, a P/E of 24-29x looks fairly priced. It is not aggressively overvalued.
Strengths vs. Risks
Frequently Asked Questions (FAQs)
- Q: What is the Tenneco Clean Air IPO?
A: It's a ₹3,600 crore IPO from a leading auto-parts manufacturer specializing in emission control and suspension systems. The shares will be listed on the BSE and NSE.
- Q: What is the IPO price and lot size?
A: The price band is ₹378 to ₹397 per share. The minimum investment is 1 lot (37 shares) for ₹14,689.
- Q: Why is this IPO a 100% Offer for Sale (OFS)?
A: The promoter (parent company) is selling its shares to reduce its holding from 97.25% to 74.79%, which is required by SEBI's minimum public shareholding rules.
- Q: Is Tenneco Clean Air profitable?
A: Yes. It's very profitable. It made a profit of ₹553 crores in FY25 (a 33% increase) and has excellent return ratios (ROE of 42.65%).
How to Apply for the Tenneco Clean Air IPO with IPO Ji (The Easy Way)
Ready to apply? The IPO Ji platform makes it simple and fast. Follow these 6 easy steps to place your bid for the Pine Labs IPO:
- Download and open the IPO Ji app or visit the IPO Ji website.
- Browse the list of current mainline IPOs and select "Tenneco Clean Air IPO".
- Tap the "Apply" button located next to the IPO details.
- You will be prompted to enter your application details, including your PAN, Demat account number, lot size, and bid price.
- Select UPI and enter your UPI ID to set up the payment mandate.
- Review your application details to ensure they are correct, and then submit your bid. You will receive a UPI mandate on your app to approve the payment.
That's it! Good luck, and as always, follow IPO Ji for all the latest updates!
