Tenneco Clean Air IPO Day 2: Subscription Status & Complete Analysis

Tenneco Clean Air India Ltd’s Initial Public Offering entered its second day of subscription on November 13, 2025, showing moderate investor interest with an overall subscription rate of 0.84 times. The ₹3,600 crore mainboard IPO, which opened on November 12, 2025, represents one of India’s largest automotive component sector offerings this year. As an Offer for Sale (OFS) by the parent company Tenneco Inc., this IPO provides investors with an opportunity to participate in India’s leading clean air and automotive technology solutions provider.

IPO Subscription Status Day 2

As of November 13, 2025, the Tenneco Clean Air IPO has garnered a subscription rate of 0.84 times by Day 2, reflecting cautious investor sentiment in the current market environment. The subscription data reveals varied interest across different investor categories, with Non-Institutional Investors (NIIs) leading the pack at 2.42 times subscription, demonstrating confidence from high-net-worth individuals and smaller institutional players.

The lukewarm response from Qualified Institutional Buyers at just 0.01 times subscription indicates that large institutional investors are adopting a wait-and-watch approach. Retail investors have shown moderate interest with 0.64 times subscription, while the strong NII participation at 2.42 times suggests confidence in the company’s medium-term prospects. The subscription window remains open until November 14, 2025, giving investors one more day to participate in this offering.

IPO Details and Price Band

The Tenneco Clean Air IPO is structured as a pure Offer for Sale (OFS) worth ₹3,600 crores, meaning the company will not receive any proceeds from this offering. All funds raised will go directly to the promoter selling shareholder, Tenneco Inc., after deducting offer-related expenses and applicable taxes. This OFS comprises 9.07 crore equity shares being offloaded by the parent company to meet regulatory requirements and provide liquidity to public investors.

The IPO is being managed by a consortium of premier financial institutions including JM Financial Limited, Citigroup Global Markets India Private Limited, Axis Capital Limited, and HSBC Securities and Capital Markets (India) Private Limited as book-running lead managers. MUFG Intime India Pvt. Ltd. serves as the registrar for this issue, handling the allotment process and investor queries. Additionally, the company successfully raised ₹1,080 crores from anchor investors on November 11, 2025, allocating 2.72 crore shares at ₹397 per share, demonstrating strong institutional confidence ahead of the public offering.

Company Overview and Business Model

Founded in 2018, Tenneco Clean Air India Ltd operates as the Indian subsidiary of the US-headquartered Tenneco Inc., a global Tier I supplier of automotive components with operations spanning 26 countries and 93 manufacturing facilities worldwide. The company specializes in designing, manufacturing, and supplying advanced clean air (after-treatment and exhaust systems), powertrain solutions (ignition products), and suspension technologies (shock absorbers and struts) for both Indian and international original equipment manufacturers (OEMs).

Market Leadership Position

Tenneco Clean Air India has established itself as the largest supplier of clean air solutions to Indian commercial truck OEMs with a commanding 57% market share in revenue terms. The company also dominates the passenger vehicle segment with a 52% market share in shock absorbers and struts, and holds 68% of the off-highway equipment market (excluding tractors). This market leadership stems from the company’s technological superiority, deep OEM relationships, and ability to meet stringent BS-VI emission compliance norms that have become mandatory in India.

Product Portfolio and Technology

The company’s diversified product portfolio includes catalytic converters, diesel particulate filters (DPF), mufflers, exhaust manifolds, ignition products, shock absorbers, struts, and complete suspension systems. These products are critical for automotive manufacturers to comply with increasingly stringent emission regulations while maintaining vehicle performance and durability. Tenneco Clean Air India leverages its parent company’s global research and development capabilities, manufacturing expertise, and supply chain networks to deliver cutting-edge solutions tailored for Indian market conditions.

Financial Performance Analysis

Tenneco Clean Air India’s financial performance demonstrates the company’s operational efficiency and profitability despite facing headwinds in FY 2025. The company reported revenue from operations of ₹4,890.43 crores in FY 2025, representing an 11% decline from ₹5,467.61 crores in FY 2024. This revenue contraction was primarily driven by a significant 57.44% decrease in substrate revenue, though partially offset by a 2.61% increase in value-added revenue (VAR). The decline in substrate business reflects changing dynamics in the automotive supply chain and pricing pressures.

Profitability Improvement

Despite the revenue decline, Tenneco Clean Air India achieved remarkable profitability improvement in FY 2025. The company’s net profit surged 33% to ₹553 crores from ₹417 crores in FY 2024, driven by significant operational efficiency gains. The EBITDA margin expanded by an impressive 545 basis points to 16.67%, primarily due to a substantial reduction in royalty expenses and improved cost management. The PAT margin also improved by 368 basis points to 11.31%, reflecting the company’s pricing power and operational leverage.

The company’s return on capital employed (ROCE) of 56.78% in FY 2025 demonstrates exceptional capital efficiency and asset utilization. This high ROCE indicates that Tenneco Clean Air India generates strong returns on the capital invested in its business, making it an attractive investment proposition from a financial metrics perspective. The company also maintained a healthy free cash flow to EBITDA ratio of 61.04%, indicating strong cash generation capabilities that support dividend payments and future growth investments.

Grey Market Premium (GMP) Analysis

The grey market premium (GMP) for Tenneco Clean Air IPO has shown volatility but currently indicates positive sentiment among informal market participants. As of November 13, 2025, at 8:30 AM, the IPO’s GMP stood at ₹85 per share, suggesting a potential listing price of ₹482 per share. This represents a premium of approximately 21.41% over the upper price band of ₹397, indicating that unlisted shares are trading at significant premiums in the grey market.

It’s important to note that grey market premiums are not regulated or official indicators of future listing performance. They represent speculative trading activity in the unofficial market before shares are listed on stock exchanges. While a positive GMP generally suggests favorable market sentiment, it can be influenced by various factors including overall market conditions, sectoral trends, and speculative activity. Investors should conduct their own due diligence rather than relying solely on GMP data. For comprehensive IPO analysis, you can also refer to our detailed guide on Tenneco Clean Air IPO 2025.

Key Dates and Timeline

The Tenneco Clean Air IPO follows a structured timeline as mandated by SEBI regulations for public offerings in India. Understanding these key dates helps investors plan their participation and track the progress of their applications from subscription to listing. The streamlined IPO process in India now ensures that the entire cycle from subscription closing to listing is completed within a week, providing faster liquidity to investors.

Allotment Process

The allotment process for the Tenneco Clean Air IPO will be finalized on November 17, 2025 (T+1 day), where T represents the IPO closing date. The registrar, MUFG Intime India Pvt. Ltd., will work in coordination with the stock exchanges to determine the basis of allotment based on subscription levels in each category. Investors can check their allotment status on the registrar’s website by entering their PAN number, application number, or demat account number. In case of oversubscription in any category, allotment will be determined through a computerized lottery system to ensure fair distribution.

For unsuccessful applicants, refunds will be initiated on November 18, 2025, with funds credited back to the bank account used for UPI or ASBA blocking. Successful applicants will see shares credited to their demat accounts on the same day, enabling them to sell the shares on the listing day if they wish to exit immediately. The shares are scheduled to list on both NSE and BSE on November 19, 2025, providing liquidity to all allotted investors.

Strengths and Risk Factors

Key Strengths

Tenneco Clean Air India possesses several competitive advantages that position it strongly in India’s automotive component industry. The company’s market leadership across multiple product segments provides pricing power and economies of scale. Its dominant positions in clean air solutions for commercial vehicles (57% market share), shock absorbers for passenger vehicles (52% market share), and off-highway equipment (68% market share) create high barriers to entry for competitors and ensure stable revenue streams from India’s top automotive OEMs.

The company benefits from global technology transfer from its parent Tenneco Inc., which operates 93 manufacturing facilities across 26 countries and has decades of experience in automotive component technology. This access to cutting-edge research and development, advanced manufacturing processes, and global supply chain best practices allows Tenneco Clean Air India to offer products that meet international quality standards while being competitively priced for the Indian market. The parent company’s financial backing also provides stability and resources for expansion and innovation.

• Strong OEM relationships: Long-term partnerships with Maruti Suzuki, Hyundai, Tata Motors, Mahindra & Mahindra, Ashok Leyland, and other leading Indian automakers
• Diversified product portfolio: Presence across clean air, powertrain, and suspension segments reduces dependence on any single product line
• Operational efficiency: EBITDA margin of 16.67% and ROCE of 56.78% demonstrate superior capital deployment and cost management
• Growing export business: Increasing contribution from export markets diversifies revenue sources and reduces dependence on domestic demand
• BS-VI compliance expertise: Critical capability as emission norms become more stringent globally, particularly in emerging markets

Risk Factors

Despite its strengths, Tenneco Clean Air India faces several risks that investors should carefully consider before investing. The company’s high exposure to the domestic automotive sector makes it vulnerable to cyclical downturns in vehicle sales. In FY 2025, approximately 81.35% of the company’s revenue came from domestic operations, creating significant concentration risk. Any slowdown in India’s automotive industry due to economic headwinds, regulatory changes, or shift in consumer preferences toward alternative mobility solutions could materially impact the company’s financial performance.

Other significant risks include raw material price volatility (steel, aluminum, precious metals used in catalytic converters), intense competition from domestic and international players, dependence on a limited number of large OEM customers, and potential technology disruption from the shift toward electric vehicles. The rapid adoption of EVs could reduce demand for emission control systems and traditional powertrains, though the company’s suspension business would remain relevant. Foreign exchange fluctuations also pose risks given the company’s import requirements and export revenues.

Should You Invest?

The Tenneco Clean Air IPO presents a mixed investment proposition that requires careful evaluation based on individual risk appetite and investment horizon. On the positive side, the company’s market leadership, strong financial metrics (16.67% EBITDA margin, 56.78% ROCE), and access to global technology provide a solid foundation. The improving profitability despite revenue headwinds demonstrates operational resilience and management’s ability to navigate challenges. For long-term investors betting on India’s automotive growth story, Tenneco’s dominant market positions could translate into sustained returns.

However, several concerns warrant caution. The 11% revenue decline in FY 2025 raises questions about growth sustainability and market demand. The fact that this is entirely an Offer for Sale means the company receives no proceeds for expansion, debt reduction, or working capital improvement. The funds benefit only the promoter, which may not align with investor interests seeking companies that reinvest capital for growth. Additionally, the lukewarm QIB response (0.01x subscription) suggests that sophisticated institutional investors are not convinced about the valuation or near-term prospects.

Investors should also monitor how the ongoing shift toward electric vehicles affects the company’s product mix and revenue streams. While emission control systems may see declining demand over the long term, suspension products will remain relevant. Diversification into EV-related components and strong relationships with OEMs transitioning to electric platforms will be critical for sustained growth. For those interested in the upcoming IPO pipeline, check out our comprehensive guide on PhysicsWallah IPO 2025. Additionally, to understand broader market trends, read our analysis on Mutual Fund AUM hitting record levels in October 2025.

How to Apply for Tenneco IPO

Applying for the Tenneco Clean Air IPO is a straightforward process that can be completed entirely online through your bank’s net banking portal or your broker’s trading platform. Retail investors can apply using either the ASBA (Application Supported by Blocked Amount) facility through their bank or the UPI (Unified Payments Interface) method for applications up to ₹5 lakhs. The UPI method is generally faster and more convenient, allowing instant application submission and fund blocking.

Step-by-Step Application Process

1. Login to your trading/bank account: Access your broker’s trading platform (Zerodha, Dhan, Upstox, ICICI Direct, etc.) or bank’s net banking portal that offers IPO application services
2. Navigate to IPO section: Find the IPO application section, typically labeled as “IPO” or “Primary Market” in the menu
3. Select Tenneco Clean Air IPO: Choose the Tenneco Clean Air India Ltd IPO from the list of open issues
4. Enter bid details: Input the number of lots you wish to apply for (minimum 1 lot = 37 shares), select the price per share (₹397 for retail category), and choose retail investor category
5. Review application: Verify all details including bid amount (₹14,689 for 1 lot at ₹397), investor category, and bank account for fund blocking
6. Authorize with UPI: If using UPI method, approve the mandate request on your UPI app (Google Pay, PhonePe, Paytm, etc.) to block funds
7. Submit application: Confirm submission and save the acknowledgment receipt with application number for tracking

Retail investors can apply for a minimum of 1 lot (37 shares = ₹14,689) and a maximum of 13 lots (481 shares = ₹190,957) at the upper price band. The application must be in multiples of the lot size. Ensure your demat account has valid KYC and PAN linked before applying. Also verify that you have sufficient funds in your bank account for blocking, as applications without adequate balance will be rejected. The funds remain blocked in your account until allotment, and only the allotment amount is debited while the remaining is unblocked.

Frequently Asked Questions