Tenneco clean air india IPO review

 Information about *Tenneco Clean Air India IPO*:

1. Year from starting business / Foundation year

- NA

2. HQ or founder state

- *Headquarters:* Kancheepuram, Tamil Nadu, India.

- *Parent company:* Tenneco Group (USA).

3. Industry of business

- *Automotive Components:* Clean air, powertrain, and suspension systems for OEMs.

4. Main verticals of business / Major products

- *Clean Air & Powertrain Solutions (57.5% of FY25 revenue):* Emission control, exhaust systems.

- *Advanced Ride Technologies (42.5% of FY25 revenue):* Shock absorbers, struts.

- *Markets:* Commercial vehicles (22.8%), passenger vehicles (63.9%), industrial, aftermarket.

5. Revenue total and breakup (%)

- *FY25 Revenue:* ₹4,890.4 crore

    - *Passenger Vehicles:* 63.9%

    - *Commercial Vehicles:* 22.8%

    - *Industrial:* Minor share

    - *Aftermarket:* Minor share

    - *Exports:* 6%

6. Revenue breakdown: Country/State

- *India:* 93.6%

- *Exports:* 6.4% (US, Europe, Asia).

- *State-wise:* Not specified.

7. Major good points

- *Market leader* in clean air (57%) and suspension (52%) in India.

- Strong OEM relationships (Maruti, Tata, Mahindra).

- Tighter emission norms (BS7, CAFE) boost demand.

- *Net cash position:* ₹286 crore (FY25).

8. Major drawbacks

- *Slow revenue growth:* ₹4,890 crore (FY25) vs. ₹5,467 crore (FY24).

- High dependency on ICE (risk from EV transition).

- Royalty (2.5% of revenue) to parent until 2031.

9. Major strengths

- *Technology:* Access to Tenneco Group’s global R&D.

- *Margins:* 16.7% (industry-leading).

- *ROE:* 42.6%, *ROCE:* 56.8%.

10. Major weakness

- *Stagnant topline.*

- *Concentration risk:* Top 3 customers = 46.3% revenue.

11. Financial Information

1. *Revenue (₹ crore) & Growth*

    - FY23: ₹4,827.4 (+10.6%)

    - FY24: ₹5,467.6 (-10.6%)

    - FY25: ₹4,890.4

2. *Profit & Margin*

    - FY23: ₹381 crore (7.9%)

    - FY24: ₹416.8 crore (7.6%)

    - FY25: ₹553.1 crore (11.3%)

3. *EBITDA & Margin*

    - FY23: ₹815 crore (16.7%)

    - FY24: ₹571 crore (10.4%)

    - FY25: ₹815 crore (16.7%)

4. *Debt*

    - FY23: ₹14 crore

    - FY24: ₹0

    - FY25: ₹0

5. *Debt/Equity:* -0.17 (net cash).

12. Valuation Parameters

1. *ROE:* FY23: 27.6%, FY24: 37.3%, FY25: *42.6%*

2. *ROCE:* FY23: 39.1%, FY24: 47.2%, FY25: *56.8%*

3. *RONW:* FY23: 27.6%, FY24: 37.3%, FY25: *46.7%*

4. *EPS:* ₹13.68 → *PE (upper band):* 29x

5. *NAV:* ₹31.1 → *PB:* 12.8x

6. *Peers Comparison*

    - *PE:* Gabriel (85x), Uno Minda (70x), Sona BLW (48x).

    - *ROE:* Gabriel (9.6%), Uno Minda (11.2%), Sona BLW (27.5%).

    - *RONW:* Similar trend.

13. Promoters holding

- *Pre-IPO:* 100% (Tenneco Mauritius Holdings: 82.69%)

- *Post-IPO:* ~74.79% (OFS, no dilution).

14. Promoters holding last 3 years

- *Stable at ~100%* (promoter group).

15. IPO type

- *100% Offer for Sale (OFS).* No fresh issue.

16. IPO size

- *₹3,600 crore (OFS).* No fresh issue.

17. Use of funds

- *None.* Proceeds go to promoters.

18. Brokerage reviews

- *Mixed*:

    - *JM Financial:* "Balanced mix of strengths (market leader, margins) and risks (slow growth, EV transition)."

    - *Axis Capital:* "Reasonably priced at 29x earnings, but topline growth lags peers."

    - *HSBC:* "Subscribe for long-term OEM dominance; monitor EV impact."

- *Investor advice:* Conduct *due diligence*, assess risk appetite.

Final Note

Tenneco is a *strong player* in India’s auto components sector but faces *EV transition risks*. Evaluate *grey market premium (₹50–₹64)* and *listing expectations* (₹447–₹458).