Could Tenneco's IPO Be Your Next Big Investment Opportunity?

India's automotive industry is undergoing a significant transformation — transitioning from BS-IV to BS-VI emission standards and embracing hybrid and low-emission technologies in place of traditional engines.

Betting on this transformation, Tenneco Clean Air India Ltd is gearing up to go public with a Rs 3,600-crore IPO, entirely in the form of an offer-for-sale. The subscription window will remain open until November 14.

But the crucial question is — is this IPO a sound investment or should you tread carefully? Explore our in-depth IPO analysis covering growth prospects, financials and potential red flags before you decide.

Tenneco Clean Air India IPO Details 

• Issue Details: Mainstream
• Issue Size: Rs 3,600 crore
• Price Band: Rs 378 – Rs 397
• Lot Size: 37 shares
• Listing Date: November 19, 2025

Tenneco Clean Air India: Business Overview

• TCAIL, a subsidiary of US-based Tenneco Inc, is one of India’s leading automotive component manufacturers. It operates across three key segments: Clean Air Solutions, Powertrain Solutions and Advanced Ride Technologies.
• The Clean Air Solutions segment focuses on exhaust after-treatment systems such as catalytic converters, mufflers and exhaust pipes for Original Equipment Manufacturers (OEMs). The Powertrain Solutions segment manufactures engine bearings, sealing systems and ignition products, while the Advanced Ride Technologies segment produces shock absorbers, struts and suspension systems for both Internal Combustion Engine (ICE) and Electric vehicles (EV).
• TCAIL operates 12 plants across 7 states and 1 Union Territory. It derives around 56% of its revenue from clean air and powertrain solutions, with the remaining 44% coming from advanced ride technologies.

Tenneco Clean Air India Key Strengths

• Market Leadership: TCAIL is a dominant player in the Indian automotive components space. In FY25, it held a 57% market share in Clean Air Solutions for Commercial Transport (CT) OEMs, 68% for Off-Highway (OH) OEMs (excluding tractors) and 19% for Passenger Vehicle (PV) OEMs, ranking among the top four suppliers in this segment. It is also the largest supplier of shock absorbers and struts to Indian PV OEMs, with a market share of 52%.
• Long-standing Customer Relationships: TCAIL has built enduring partnerships with both Indian and global OEMs. In FY25 and Q1FY26, it served 119 and 101 customers respectively, including all top 7 PV OEMs and all top 5 CT OEMs in India. Its top 10 customers have been associated with the company for an average of over 19 years, reflecting strong customer stickiness driven by its customized and technology-intensive product offerings.
• Profitability-driven Growth: Despite flat revenue growth, TCAIL has delivered robust profitability, with EBITDA and net profit growing at a CAGR of 20% between FY23 and FY25, reflecting its focus on operational efficiency and sustainable profit expansion.
• Margin Expansion: TCAIL has steadily enhanced its margins, with net profit margins improving from 7.89% in FY23 to 11.31% in FY25 and further to 13.07% in Q1FY26. EBITDA margins rose from 11.82% to 16.67% during the same period, driven by disciplined cost management and operational leverage.
• Superior Return Ratios: TCAIL boasts a Return on Equity of 42.65% for FY25, outperforming its peers. Additionally, a Return on Capital Employed (ROCE) of 56.78% highlights the company's efficient use of capital.

Tenneco Clean Air India Risk Factors

• Client Concentration: TCAIL’s revenue is highly concentrated, with the top ten clients accounting for 82% of its operating revenue in FY25. The largest client alone contributed 19%. A loss or reduction in business from any of these key clients could significantly impact the firm’s financial stability and revenue streams.
• Sectoral Exposure: Over 80% of TCAIL’s revenue is derived from the PV and CV segments in India. This heavy reliance on these sectors exposes the company to cyclical downturns and shifts in demand.
• Regulatory Risk: TCAIL’s operations are highly influenced by government regulations, particularly emission standards. Any delays in the implementation of stricter emission norms could adversely affect business growth and operational performance.
• Whistleblower Complaints: TCAIL has received multiple whistleblower complaints in the past. If any of these allegations, such as misstatements, fraud or deficiencies in internal controls, are substantiated, they could damage the company's reputation and have a negative impact on its operations.

Final Thoughts: Should You Subscribe to Tenneco Clean Air India’s IPO?

• TCAIL, a subsidiary of the US-based Tenneco Group, holds a strong market position, benefiting from deep OEM relationships and access to advanced global technology. Its leadership in high-margin automotive components makes it a significant player in India’s manufacturing sector.
• With tightening emission regulations, including BS6, CEV-IV and the upcoming BS7, CEV-V, TREM V and CAFE norms, TCAIL is well-positioned to benefit. Stricter norms across passenger, commercial and industrial vehicles will drive increased demand for its clean air systems.
• From a valuation standpoint, the IPO appears reasonably priced with a P/E multiple of 29x FY25 earnings, given the company’s strong financials, global backing and growth potential in the clean air sector.
• TCAIL’s balance sheet is notably strong, with a net cash position, negative working capital and industry-leading return ratios, indicating strong capital discipline and operational efficiency.
• Given these factors, the IPO presents an attractive opportunity for short term as well as long term investors.

For a deep dive into other IPOs, explore: IPO Corner on Liquide