Tenneco Clean Air India IPO

Tenneco Clean Air India Limited IPO Strengths

Market Leadership and Strong Customer Relationships

Tenneco Clean Air India Limited holds a commanding market position as a leading supplier of automotive components in India. The company leads the market in shock absorbers and struts for passenger vehicles and holds significant market share for clean air solutions in various segments. Its strong, long-standing relationships with 119 diverse customers, including all top OEMs, enable sustained growth.

Strategic Portfolio and Diversified Revenue Streams

The company’s strategically diversified portfolio includes proprietary products and solutions for multiple industry sub-segments, such as exhaust aftertreatment systems, bearings, and advanced suspension systems. By also generating revenue from the aftermarket and exports, the company effectively mitigates risks from domestic automotive downturns and ensures stable financial performance.

Innovation Driven by Global R&D Collaboration

Tenneco Clean Air India Limited maintains an innovation-focused approach by leveraging its two R&D technical centers in India and the extensive global R&D initiatives of the Tenneco Group. This enables the company to develop and localize proprietary, customized, and cost-effective products, such as BS6-compliant solutions and India’s first electronic suspension system for Mahindra.

Flexible and Automated Manufacturing with a Localized Supply Chain

The company’s robust manufacturing footprint consists of 12 strategically located plants across India, supported by a highly localized supply chain. These facilities incorporate advanced automation, robotics, and quality control systems to ensure high efficiency, product quality, and a defect rate of less than two parts per million.

Strong Financial Performance

Tenneco Clean Air India Limited has demonstrated strong financial performance with consistent growth and improved margins. In Fiscal 2025, the company achieved a profit of ₹5,531.43 million, a CAGR of 20.48% over three years. Its financial metrics, including a superior return on equity and return on capital employed, outperform the peer average.

Experienced Leadership and Skilled Workforce

The company is guided by a qualified and experienced board of directors and a professional management team with decades of industry expertise. The leadership is supported by a dedicated and technically qualified workforce, which receives continuous training to stay updated with the latest manufacturing technologies, ensuring continuity and excellence in operations.

More About Tenneco Clean Air India Limited

Tenneco Clean Air India Limited is part of the Tenneco Group, a U.S.-headquartered global Tier I automotive component supplier. The Tenneco Group reported revenue of US$16,777 million in 2024 (Source: CRISIL). Established in 1979 at Parwanoo, India, the company designs, manufactures, and supplies technology-intensive Clean Air, Powertrain, and Advanced Ride Technologies solutions for both domestic and export markets.

Business Divisions

Clean Air & Powertrain Solutions:

• Clean Air Solutions: Exhaust after-treatment systems, including catalytic converters, mufflers, and exhaust pipes.

• Powertrain Solutions: Engine bearings, sealing systems, spark plugs, and ignition coils under the Champion brand.

Advanced Ride Technologies:

• Shock absorbers, struts, and suspension systems under the Monroe brand for ICE and electric vehicles.

Market Position

• Largest Clean Air supplier to Indian commercial truck OEMs (60% market share).

• Among top two suppliers to Indian off-highway OEMs (42% share).

• Top four supplier to passenger vehicle OEMs (20% share).

• Largest supplier of shock absorbers/struts to Indian PV OEMs (48% share).

Manufacturing & R&D

Tenneco Clean Air India operates 12 manufacturing facilities across seven states and one union territory, including seven Clean Air & Powertrain and five Advanced Ride Technologies plants. Facilities feature process automation, robotic welding, and adhere to IATF 16949, ISO 45001, and ISO 14001 standards.

The company runs two R&D technical centers in India, collaborating with 39 global Tenneco engineering centers to develop localized, cost-efficient solutions. Notable innovations include BS6-compliant products and advanced hydraulic rebound systems.

Customers & Partnerships

In Fiscal 2025, Tenneco served 119 customers, including all top seven PV and top five CT OEMs in India. Long-standing relationships average 19.2 years with top 10 customers, ensuring strong customer stickiness and program continuity.

Performance & Recognition

Fiscal 2025 highlights include revenue of ₹48,904.30 million, VAR of ₹43,801.21 million, EBITDA margin of 16.67%, PAT margin of 11.31%, and ROCE of 56.78%. The company has received numerous awards from global OEMs for innovation, quality, and operational excellence, reflecting its commitment to high standards.

Supply Chain & Sustainability

Tenneco Clean Air India maintains a localized, efficient supply chain with over 91% of raw materials sourced domestically, leveraging global procurement practices, just-in-time planning, and shared manufacturing assets to optimize cost and responsiveness.

Industry Outlook

Market Size & Growth Trends

The Indian automotive component industry reached a turnover of ₹6.73 lakh crore (approximately $80.2 billion) in FY2025, registering a 9.6% year-on-year growth. Over the past five years, the industry has nearly doubled in size, reflecting a compound annual growth rate (CAGR) of 14%. Looking ahead, the sector is expected to grow at a CAGR of 7–9% in FY2026, supported by continued demand from two-wheelers and passenger vehicles.

Key Growth Drivers

• Domestic Demand: Rising middle-class incomes and increasing vehicle ownership are boosting domestic sales.

• Export Growth: Exports reached nearly $23 billion in FY2025, reflecting India’s growing competitiveness in global markets.

• Technological Advancements: Adoption of smart manufacturing, electric vehicle components, and advanced driver assistance systems (ADAS) is driving innovation.

• Policy Support: Government initiatives such as the Automotive Mission Plan and Free Trade Agreements provide incentives and support industry expansion.

Sectoral Highlights

• Two-Wheelers & Passenger Vehicles: These segments account for nearly half of the industry’s revenue, with strong demand for utility and passenger vehicles.

• Commercial Vehicles & Tractors: Moderate growth in these segments (~17% share) supports steady industry expansion.

• Electric Vehicle Components: Growing EV adoption is encouraging domestic production of critical components like rare earth magnets.

How Will Tenneco Clean Air India Limited Benefit

• Tenneco Clean Air India Limited will benefit from rising domestic vehicle demand, expanding its Clean Air and Powertrain solutions sales.

• Strong export growth positions the company to supply global markets with technology-intensive components.

• Technological advancements, including EV adoption and advanced suspension systems, create new opportunities for Advanced Ride Technologies.

• Long-standing relationships with top OEMs ensure continued program awards and customer stickiness.

• Localized manufacturing and R&D enable cost-efficient production and faster time-to-market for BS6-compliant and EV-ready products.

• High market shares in commercial trucks, off-highway vehicles, and passenger vehicles strengthen competitive positioning.

• Efficient supply chain management and domestic sourcing optimize costs and improve responsiveness to changing market demand.

• Recognition for quality, innovation, and operational excellence enhances brand credibility and supports long-term partnerships.

• Integration with Tenneco Group’s global R&D and technical resources accelerates innovation and product development for Indian and export markets.

Peer Group Comparison

Name of the Company	Face Value (₹)	Revenue (₹ million)	EPS (₹)	NAV (₹)	PE Ration	RoNW (%)
Tenneco Clean Air India Limited	10	48,904.30	13.68	31.10	[•]##	46.65%
Peer Groups
Bosch Ltd	103	1,80,874.00	683.25	4,683.48	46.21	15.56%
Timken India Ltd	10	31,478.10	59.48	378.21	54.61	17.00%
SKF India Ltd	10	49,199.00	114.50	525.50	40.20	21.43%
ZF Commercial Vehicle Control System India Ltd	51	38,309.63	242.90	1,694.75	53.71	15.35%
Sharda Motor Industries Ltd	2	28,365.71	109.71	369.92	16.92	30.46%
Gabriel India Ltd	15	40,633.81	17.05	82.38	34.73	22.42%
Uno Minda Ltd	2	1,67,746.10	16.42 (Basic) / 16.37 (Diluted)	99.75	64.51	17.66%
Sona BLW Precision Forgings Ltd	10	35,460.21	9.92	288.38	48.12	14.76%

Key Strategies for Tenneco Clean Air India Limited

Capturing Market Opportunities from Stricter Emission Standards

Tenneco Clean Air India Limited leverages tightening global and Indian emission regulations, including BS7, CAFE, TREM V, and CPCB standards. By engaging OEMs early and adapting global technologies to local requirements, the company aims to increase demand, enhance CPV, and strengthen its Clean Air Solutions market position.

Capitalising on Premiumisation, SUVs, EVs, and Hybrids

The company targets opportunities from rising premium vehicle, SUV, EV, and hybrid sales, delivering high-performance engines and modular exhaust systems. Advanced technologies optimise efficiency, weight, and emissions compliance, while suspension innovations and adaptive solutions enhance ride quality, addressing evolving customer preferences and increasing CPV.

Enhancing Competitiveness through Strategic Localisation

Tenneco Clean Air India Limited focuses on localising global products, reducing logistics costs, import duties, and supply chain risks. By manufacturing critical Advanced Ride Technologies components, IROX bearings, and ceramic spark plugs locally, the company improves margins, expands OEM share of wallet, and captures growth in under-penetrated markets.

Positioning India as a Global Export Hub

The company leverages India’s cost advantages, strategic location, and manufacturing capabilities to serve global Tenneco Group and third-party OEM customers. By exporting high-quality components, enhancing vertical integration, and exploring new adjacent products, Tenneco aims to increase export revenues while maintaining global quality standards.

Focus on R&D and Innovation

Tenneco Clean Air India Limited invests in R&D to develop advanced Clean Air, Powertrain, and suspension technologies. The company addresses regulatory trends, premiumisation, hybridisation, and alternative fuels, adapting global innovations to local needs, improving fuel efficiency, emissions reduction, and driving market differentiation through cutting-edge products.

Leveraging Cross-Divisional Efficiencies and Opportunities

By consolidating Clean Air, Powertrain, and Advanced Ride Technologies divisions, Tenneco maximises cross-selling opportunities, utilises shared suppliers, standardised processes, and P3/OSE methodologies. The company targets unserved programs, expands customer relationships, and drives revenue growth while maintaining operational efficiency and competitive pricing across business lines.

Enhancing Operational Efficiencies for Sustained Profitability

Tenneco Clean Air India Limited focuses on cost optimisation across materials, manufacturing, labour, and indirect functions. Through P3 operating systems, inventory optimisation, vendor-managed models, and strategic supplier partnerships, the company improves margins, cash flow, and production capacity while supporting growth aligned with technological advancements.