Tenneco Clean Air IPO EXPLODES: Subscribes 12X! Is a Massive Listing Gain Coming?

Author

Satyam Jha | Whalesbook News Team

Detailed Coverage:

Tenneco Clean Air India Limited's Initial Public Offering (IPO) has concluded its bidding process with an overwhelming subscription of 11.94 times, attracting bids for approximately 79.59 crore shares against the 6.66 crore shares on offer. The final day of bidding on Friday saw robust participation across investor categories.

The Non-Institutional Investors (NIIs) segment was the most aggressive, subscribing 26.86 times, followed by Qualified Institutional Buyers (QIBs) at 15.90 times. Retail Individual Investors (RIIs) also showed significant interest, with their portion being subscribed 3.28 times.

Before the public issue opened, the company had already garnered Rs 1,080 crore by allotting shares to anchor investors. The total IPO size is valued at Rs 3,600 crore, with the bidding process concluding on November 14. The allocation of shares is expected by November 17, and the stock is slated for listing on November 19.

Grey market activity further fuels investor optimism. Platforms tracking the grey market indicate a Grey Market Premium (GMP) of over 22%. Specifically, Investorgain reported a GMP of Rs 89, suggesting a potential listing gain of 22.42%, while IPO Watch noted a 19% GMP.

The primary objective stated in the draft papers for this IPO is to achieve the benefits associated with listing the company's shares.

Tenneco Clean Air India Limited is a key player in manufacturing and supplying highly engineered clean air, powertrain, and suspension solutions, catering to Indian Original Equipment Manufacturers (OEMs) and export markets. It is part of the global Tenneco Group based in the US.

Impact: This strong subscription and positive GMP suggest significant investor confidence in Tenneco Clean Air India Limited and its business prospects. A successful listing could boost market sentiment for similar upcoming IPOs in the automotive component sector. The performance of its shares post-listing will be closely watched by investors. The company's ability to deliver on its growth plans and profit projections will determine its long-term stock market valuation. Rating: 7/10

Difficult terms explained: IPO (Initial Public Offering): This is the process where a private company offers its shares to the public for the first time, allowing it to raise capital from investors and become a publicly traded entity. Subscription: In an IPO, subscription refers to the extent to which the shares offered to the public have been applied for. A subscription of 'X times' means that for every share offered, 'X' applications were received. Grey Market Premium (GMP): This is an unofficial indicator of demand for an IPO. It represents the premium at which IPO shares are trading in the grey market (an unregulated market) before their official listing on stock exchanges. A positive GMP suggests strong demand and expectations of listing gains. Anchor Investors: These are institutional investors (like mutual funds, insurance companies, or foreign portfolio investors) who commit to buying a large portion of an IPO before it opens to the general public. They provide stability and credibility to the issue. Qualified Institutional Buyers (QIBs): These are large institutional investors who are registered with capital market regulators and are permitted to invest in public issues. Examples include mutual funds, venture capital funds, and foreign institutional investors. Non-Institutional Investors (NIIs): This category includes high-net-worth individuals, companies, trusts, and other entities that invest more than the retail investor limit (typically above Rs 2 lakh) but are not QIBs. Retail Individual Investors (RIIs): These are individual investors who apply for shares up to a certain limit (usually Rs 2 lakh) in an IPO. Original Equipment Manufacturers (OEMs): These are companies that produce finished goods (like vehicles) and integrate various components supplied by other manufacturers into their final product. Tenneco Clean Air India supplies components to them.