The company listed at Rs 505 on the NSE and Rs 498 on the BSE, translating into premiums of 27% and 25.4%, respectively, closely mirroring the last grey-market premium of Rs 103 updated early Wednesday, which implied an estimated 26% listing gain.
But the enthusiasm cooled quickly. On the NSE, the stock fell as much as 4.9% from its opening level to an intraday low of Rs 480.10. On the BSE, it dropped 3.7% from the Rs 498 open to Rs 479.75.
Should investors book profits or stay put?
Offering a post-listing read on the stock’s next moves, Shivani Nyati, Head of Wealth at Swastika Investmart, said that Tenneco Clean Air India’s strong opening was supported by investor confidence in the company’s global backing, advanced clean-air and emission-control technology, and long-standing relationships with major automobile OEMs. Its diversified product range and alignment with tightening emission norms further strengthened sentiment.
“Despite the upbeat debut, some caution remains due to the auto sector’s cyclicality, dependence on OEM volumes, and raw-material–linked margin pressures. The IPO attracted solid institutional interest, driven by expectations of steady demand for emission-control systems and operational gains as scale improves. Allottees may consider booking partial gains and holding the rest with a stop-loss near Rs 480,” said Nyati.
IPO snapshot
The Rs 3,600-crore IPO, an entirely offer-for-sale issue of 9.07 crore shares by Tenneco Group promoter entities, saw vigorous institutional demand during the November 12–14 subscription window. The offer was subscribed to 61.79 times in total, powered by a massive 174.78 times interest from qualified institutional buyers. Non-institutional investors bid nearly 43 times their quota, while retail participation came in at 5.37 times.Analysts tracking the issue noted that Tenneco Clean Air India offers exposure to a leading Tier-I automotive component supplier with entrenched market positions across emission-control systems, powertrain components and suspension technologies.
Rajan Shinde, Research Analyst at Mehta Equities, said, “We think that as the company is backed by the US-based Tenneco Group, the company enjoys strong global parentage, technological capabilities, and long-standing relationships with all top Indian OEMs. Its leadership in multiple categories, holding a 57% share in Clean Air Solutions for CVs, 68% for off-highway vehicles, and 52% in shock absorbers for PVs, TCAIL is well-positioned to benefit from tightening emission norms (BS7, TREM V, CAFE) and the industry’s shift toward cleaner and more efficient mobility solutions.”
Financials show margin strength despite revenue dip
While FY25 revenue declined 11% to Rs 4,931 crore, profitability strengthened meaningfully. Net profit rose 33% to Rs 553 crore, EBITDA expanded to Rs 815 crore, and margins improved, with EBITDA margin at 16.67% and PAT margin at 11.31%. Return ratios remained strong, with ROE at 42.65% and ROCE at 56.78%.
Based on FY25 earnings, the issue was priced at a P/E of around 24 times, considered fair among auto-component peers. Analysts said the optimism stems from Tenneco’s alignment with tightening global emission standards and its diversified product footprint across clean-air systems and advanced ride technologies.
And for investors still weighing their next move, Nyati’s guidance may prove the early compass: partial profit-taking, with the rest held cautiously above a stop-loss near Rs 480.
Also read | Tenneco Clean Air India shares make a healthy D-St debut, list at 27% premium on NSE
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
