Apollo’s acquisition and operational overhaul transformed a struggling auto parts unit into a profit powerhouse set for a ₹3,600 crore listing.
07 Nov 2025 | 7065 Views | By Shahkar Abidi
The transformation began quietly in 2022, far from the glare of public markets. When Apollo Global Management acquired Tenneco Inc. for $7.1 billion in November that year, pulling in the struggling American automotive supplier, few anticipated the sweeping changes that would ripple through to its Indian operations. What followed was ...
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The transformation began quietly in 2022, far from the glare of public markets. When Apollo Global Management acquired Tenneco Inc. for $7.1 billion in November that year, pulling in the struggling American automotive supplier, few anticipated the sweeping changes that would ripple through to its Indian operations. What followed was not merely a financial restructuring but a fundamental reimagining of how the company would compete in one of the world’s fastest-growing automotive markets.
Today, Tenneco Clean Air India Ltd stands poised for its market debut, having increased its initial public offering to ₹3,600 crore from an earlier ₹3,000 crore, aiming for a valuation of over ₹16,000 crore at the upper end. The offering is entirely an offer-for-sale by promoter Tenneco Mauritius Holdings, which means that the company will not receive any proceeds from the IPO.
The mandate during the turnaround was clear: transformation. Under the subsequent leadership of CEO Jim Voss, the company embarked on a complete overhaul that blended structural and cultural reorganization. This mandate extended to a comprehensive transformation of the entire Profit & Loss (P&L) statement, encompassing cost elements like raw material cost, conversion cost, fixed costs, indirect material, automation, and labor cost.
A critical structural shift took place in the Indian operation too — a move from vertically separated business units (BUs) to a unified regional structure, in addition to other measures. This organizational change immediately yielded financial opportunities by facilitating cross-selling and allowing the company to leverage relationships with one product and one customer to sell another product to the same customer. This cross-selling efficiency is expected to drive top-line growth and offset the impact of year-over-year price reductions often negotiated by customers. Internally, the new framework includes specialized mechanisms like the Office of Strategic Execution (OSE), a dedicated team responsible for driving rapid change by targeting reductions in the cost of goods sold and enabling revenue growth through volume targets and pricing strategy.
“Tenneco has always been a great technology company. But what has happened in the last two to three years is that the company has transformed not only as a technology company but also into a company of operational excellence,” said Rishi Verma, President (India), Tenneco Clean Air India Ltd, while reflecting on his 18-year journey with the company. He spoke during a pre-IPO press briefing.
Arvind Chandrasekharan, Whole-time Director and CEO of Tenneco Clean Air India, provided a strong overview of the company’s financial health, emphasizing profitability, asset efficiency, and the positive impact of recent strategic changes. “This story is very important because India has also benefited from that culture change. India’s EBITDA performance improved 400 basis points in the last three years because of this culture change,” he noted. Tenneco established manufacturing operations in India in 1995.
According to company documents, its revenue from operations was ₹4,827 crore in fiscal year 2023. This figure rose to ₹5,468 crore in FY24, reflecting a period of expansion, before easing back to ₹4,890 crore in FY25. Despite the dip in revenue, the company’s profit after tax painted a very different picture — a consistent and robust upward climb across the same period. Starting with ₹381 crore in FY23, profits increased to ₹417 crore in FY24 and surged further to ₹553 crore in FY25.
More striking are the return metrics. The company’s return on capital employed (ROCE) reached 56.78% in fiscal 2025, up from 45.40% in FY24 and 33.51% in FY23, placing it among the most capital-efficient players in India’s automotive component sector, where the average ROCE stands at around 27.5%.
Based on a CRISIL report, Tenneco Clean Air India stands as the largest supplier of clean air solutions to Indian CV OEMs, with a market share of 57%, and to Indian OH OEMs (excluding tractors), with a market share of 68%. It is among the top four suppliers of clean air solutions to Indian PV OEMs, with a market share of 19%, and is the largest supplier of shock absorbers and struts to Indian PV OEMs, with a market share of 52%. While the company’s clean air and powertrain solutions contribute 52.6% of revenue, the advanced ride technologies division contributes the remaining 47.4%.
It boasts 12 manufacturing facilities strategically located near key OEM hubs in India, comprising four manufacturing facilities for clean air solutions and five manufacturing facilities for advanced ride technologies products. The company counts several leading vehicle manufacturers, including Maruti Suzuki, Ashok Leyland, Hyundai Motor, Mahindra, and Tata Motors, among its customers.
Tenneco Clean Air India operates in an intensely competitive market populated by global tier-one suppliers including Bosch, Timken India, SKF India, ZF Commercial Vehicle Control Systems India, Gabriel India, and Uno Minda, among several others. Its competitive advantages rest on long-standing customer relationships — the top 10 customers have partnered with the company for an average of over 19 years and access to Tenneco Group’s global intellectual property portfolio of over 5,000 patents and 7,500 trademarks.
Understanding the Indian unit’s transformation requires context from the US-based parent company’s recent history. Tenneco’s path through the early 2020s was marked by financial stress exacerbated by the Federal-Mogul acquisition in October 2018, which doubled the company’s size but also its debt burden. When Apollo announced the acquisition in February 2022, Tenneco’s shares were trading at $9.98; the private equity firm offered $20 per share, taking the company private in a transaction valued at approximately $7.1 billion including debt.
The parent company currently boasts revenue of $16,777 million in CY24. It has an employee strength of around 59,400 globally, along with 180 manufacturing plants and 39 R&D and technical centers.
“India continues to be a critical growth engine for Tenneco,” said Jim Voss, CEO of Tenneco, in May 2025 when appointing Chandrasekharan as CEO of India operations. Chandrasekharan, who previously served in senior positions at Delphi, Faurecia Exhaust Systems, Wabco Europe, Motherson Sumi Wiring India, and Minda Corporation, among others, was tasked with accelerating business growth, driving innovation in lightweight and cost-effective solutions, and positioning India as a global hub for manufacturing.
Tenneco’s strategy for India extends beyond serving the domestic market, capitalizing on India’s emergence as a global manufacturing hub for automotive components. Currently, exports constitute approximately 3% of turnover in FY24.
This ambition aligns with broader trends in India’s automotive sector. The country’s auto component industry is projected to reach $200 billion by 2030, with exports of $70–100 billion, driven by government initiatives including “Make in India” and the Production Linked Incentive scheme. India’s cost advantages in the form of competitive labor costs, a skilled workforce, and improving infrastructure make it an attractive manufacturing base for global suppliers.
Tenneco’s localization strategy supports this export push. The company has achieved approximately 88–90% localization of components, with targets to inch further up. This reduces currency exposure while improving margins and delivery times.
“India was always behind technology from the West. But right now, we’re equal to the West on technology,” Chandrasekharan added. “So, we can supply the same product that we’re selling to Indian customers — you can export that to Europe as well.”