Tenneco Clean ipo

Tenneco Clean Air operates in the auto parts sector—mainly manufacturing parts for two-wheelers, three-wheelers, and four-wheelers, including exhaust systems and suspension. The company is well-established, dating back to the late 1970s, with the current entity formed in 2018. Promoters will retain a 75% stake post-IPO, but the issue is entirely an offer-for-sale, so raised funds go to promoters, not the business. The company’s main holding is Mauritius-based (tax benefit), and royalty payments (~2.5% revenue) go to this offshore entity. The management team is experienced in automotive parts, and Tenneco Clean Air has major clients from both passenger and commercial vehicles. Revenue contributions are evenly split between these segments. Recent financials show declining revenues, with FY24 lower than FY23, reflecting waning demand—primarily due to rising electric vehicle penetration, making traditional exhaust parts less relevant. Positives (Why Investable?): Established legacy and expertise. Major OEM clients; diversified product base (suspension systems remain relevant). Reasonable promoter holding post-issue. Valuation appears better than some listed peers (lower P/E ratio). Negatives: No fresh capital for business; only promoter exit. Heavy royalty outflows to Mauritius, reducing profits. Key products (exhaust systems) becoming obsolete due to EV adoption. Declining revenue trend, risk of future degrowth. Limited innovation/R&D spending, uncertain adaptation for EV.