In a significant pre-IPO development, Tenneco Mauritius Holdings, the promoter of Tenneco Clean Air India, has offloaded a 2.75% equity stake in the company for INR 440 crore, valuing the Gurugram-based auto component major at approximately INR 16,023 crore.
The secondary sale, executed on 30 October, saw the transfer of 1.1 crore equity shares at INR 397 per share to a group of 14 marquee investors, according to the company’s investor notice.
Post the transaction, the promoter’s shareholding has reduced to 82.69% from 85.43%. The sale comes just weeks before the company’s much-anticipated INR 3,000-crore IPO, slated for November 2025.
Strong Institutional Participation
The deal attracted a strong line-up of institutional investors, reaffirming the market’s confidence in the company’s prospects. Among the major buyers were:
- 360 ONE Special Opportunities Fund – INR 75 crore (0.47% stake)
- Kotak Mahindra Life Insurance – INR 60 crore
- WhiteOak Capital – INR 55 crore
Other investors included SBI Mutual Fund, Axis New Opportunities AIF, Think India Opportunities Master Fund, Prashant Jain’s 3P India Equity Fund, and VQ Fastercap Fund.
This early interest from reputed funds suggests that Tenneco’s IPO could witness robust institutional participation.
Tenneco India IPO Structure: A Pure Offer-for-Sale
Tenneco Clean Air India’s proposed INR 3,000-crore IPO will be a pure OFS by its promoter, Tenneco Mauritius Holdings. The book-running lead managers for the IPO are JM Financial, Citigroup Global Markets India, Axis Capital, and HSBC Securities and Capital Markets (India). The DRHP was filed on 30 June 2025, and received SEBI’s approval on 3 October 2025.
Business Overview: Engineering the Future of Clean Mobility
Operating in India since 1979, Tenneco Clean Air India is one of the country’s most integrated Tier-I automotive component suppliers, catering to both domestic and export markets.
It operates across three primary verticals:
- Clean Air Solutions – Emission control systems such as catalytic converters, mufflers, and DPFs.
- Powertrain Solutions – Bearings, seals, and spark plugs under the Champion brand.
- Advanced Ride Technologies – Shock absorbers and semi-active suspension systems under the Monroe brand.
The company serves 119 OEM clients, including Maruti Suzuki, Tata Motors, Hyundai, Mahindra, Ashok Leyland, Daimler India, and Royal Enfield, among others.
With 12 manufacturing facilities across seven states and two R&D centres, the company has achieved over 80% capacity utilisation, signalling strong demand visibility and operational efficiency.
Financials: A High-Return, Debt-Free Growth Story
| Metric (FY25) | Tenneco Clean Air India |
|---|---|
| Revenue from operations | INR 4,890.4 crore |
| Profit after tax (PAT) | INR 553.1 crore (+33% YoY) |
| EBITDA Margin | 16.67% |
| ROCE | 56.78% |
| ROE | 42.65% |
| Net Debt | INR 266.2 crore cash positive |
| Current Ratio | 1.16 |
Tenneco’s impressive ROCE of 56.8% and ROE of 42.6% place it among the most capital-efficient players in India’s auto ancillary sector — outpacing peers by a wide margin.
Innovation & Global Integration
Tenneco India benefits from a strong parentage under Apollo Global Management (which acquired Tenneco LLC in 2022 for USD 7.1 billion) and leverages the Tenneco Group’s 39 global R&D centers.
Key innovations include:
- India’s first continuously variable electronic suspension for Mahindra EVs.
- Localized Euro 6 emission systems to meet India’s BS6 standards in record time.
- Multiple patents in lightweight suspensions, coated bearings, and ignition systems.
Exports currently contribute 6.46% of value-added revenue, reaching 20 countries. This is projected to grow to 10–12% in the coming years as India becomes a larger manufacturing base for the group.
Tenneco India IPO Valuation At Fair Value?
If we consider the recent deal price of INR 397 per share as a proxy for IPO pricing, Tenneco Clean Air India’s valuation metrics imply a P/E of 52.37x, P/B of 12.77x, and P/S of 3.28x.
| Metric | Tenneco Clean Air India | Bosch | SKF India | Sharda Motor Industries |
|---|---|---|---|---|
| Price / IPO (₹) | 397* | 37,245 | 2,141 | 1,034 |
| P/E (x) | 52.37* | 49.5 | 20.2 | 18.7 |
| P/B (x) | 12.77* | 7.95 | 4.07 | 5.50 |
| P/S (x) | 3.28* | 5.92 | 2.12 | 2.04 |
| ROE (%) | 42.6 | 15.6 | 21.4 | 26.5 |
| ROCE (%) | 56.8 | 21.1 | 28.8 | 34.6 |
| Debt / Equity | -0.17 | 0.01 | 0.00 | 0.05 |
| Current Ratio | 1.16 | 1.77 | 2.82 | 1.12 |
Interpretation: Premium Valuation, Strong Justification
- Earnings Multiple: At 52x earnings, Tenneco trades at a premium even to Bosch, reflecting investor confidence in its growth trajectory and margin stability.
- Book Value Multiple: The P/B of 12.77x highlights market optimism for its capital efficiency and global technology edge.
- Sales Valuation: A P/S of 3.28x places Tenneco between mature OEM suppliers (Bosch) and growth-focused midcaps (Sharda), signaling balanced investor expectations.
- Balance Sheet: With negative net debt and a current ratio of 1.16, the company enjoys financial flexibility despite lean working capital operations.
In short, Tenneco’s valuation signals that investors are pricing it as a “clean-tech industrial” rather than a traditional auto ancillary — a vote of confidence in its innovation-driven positioning.
Sector Context: Riding the Auto Component Upcycle
India’s auto component industry — now exceeding INR 5.6 lakh crore — is experiencing a technology-led revival driven by:
- Regulatory reforms (BS6-II, BS7, and EV mandates)
- Premiumization in vehicles
- Localisation and export expansion
Recent successful listings like LG Electronics India show that investors are rewarding companies combining engineering depth with global relevance. Tenneco fits that narrative squarely.
Analyst View: Priced for Performance
At the INR 397 level, Tenneco Clean Air India will list at a premium valuation — comparable to Bosch but backed by superior ROCE, ROE, and zero leverage. Analysts expect strong institutional participation given the company’s clean balance sheet, diversified OEM base, and high-margin operations.
“Tenneco India is being valued not just as an auto ancillary, but as a technology-driven clean mobility company. The premium multiple reflects that shift.”
Conclusion
Tenneco India promoter’s stake sale ahead of the IPO sets the tone for one of FY26’s most closely tracked listings. With its global R&D integration, Indian manufacturing strength, and net cash balance sheet, Tenneco Clean Air India could redefine how the market values multinational auto component players operating in India.
If the company maintains its growth momentum and export expansion trajectory, its IPO could emerge as a bellwether event for India’s industrial and clean-tech investment narrative.
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