New Delhi, Aug. 14 -- US-based alternative investment firm Apollo Global Management has pressed the sell button on another India portfolio company after signing off from a local cement maker less than three months ago.

Apollo, which is best known for its special situations private equity strategy in India and also makes private credit investments, has divested a fifth of its 74% stake in Tenneco Clean Air India Ltd.

Tenneco Clean Air is part of the US-based auto components manufacturer Tenneco Group, which is owned by Apollo. The auto-parts maker's holding company divested shares worth over Rs 3,100 crore (about $325 million) on the secondary market earlier this week.

This comes after it pulled out around Rs 4,000 crore last year, including Rs 3,600 crore in the offer for sale as part of the company's initial public offering. Prior to that, it had sold a little more than 11 million shares-or about a 2.75% stake-of Tenneco Clean Air for a total of Rs 440 crore. It sold the shares to alternative investment funds managed by SBI Funds Management, Axis Mutual Fund, 360 One, WhiteOak Capital, ValueQuest, and 3P Investment, among others, a year back.

Backstory

Tenneco Clean Air was incorporated in December 2018, though its origin dates back to 1979 when its previous avatar set up its first factory in India. It makes suspension and powertrain components, and catalytic converters for automakers. The company joined Apollo's portfolio in 2022 when the PE firm acquired Tenneco Inc in an all-cash transaction at an enterprise valuation of about $7.1 billion, including debt, and delisted the US company from the New York Stock Exchange.

That deal came four years after Tenneco itself acquired Federal-Mogul LLC from Icahn Enterprises in a deal that also added Mumbai-listed Federal-Mogul Goetze India Ltd to its network.

Tenneco had reorganised its India business ahead of the planned IPO. This reorganisation involved Tenneco Clean Air acquiring four group companies from Tenneco Group and Federal-Mogul entities through share swap transactions.

Tenneco Clean Air acquired Tenneco Automotive India Pvt Ltd, Federal-Mogul Sealings India Ltd, Federal-Mogul Bearings India Ltd, and Federal-Mogul Ignition Products India Ltd. These four are now its subsidiaries. The aggregate value of these all-stock transactions was about Rs 5,474 crore, according to data collated by VCCircle.

Tenneco Clean Air floated its IPO in November last year with a price of Rs 397 per share, valuing the company at Rs 16,023 crore (approximately $1.81 billion then).

The share price has risen since the listing, although it has corrected from the highs recorded three months ago. The company is currently valued around Rs 21,500 crore.

The value of Apollo's indirect stake is currently worth nearly Rs 13,000 crore. This means the investment firm's total harvest could reach more than Rs 20,000 crore ($2.1 billion) with future share sales.

Apollo's recent India activities

The buyout firm has been investing independently in India since 2020 after scrapping its joint venture with ICICI Venture. It also manages the affairs of this former joint venture called AION Capital Partners.

However, it has invested in only a handful of companies since then.

In February 2022, Apollo committed to invest $125 million in Hero FinCorp Ltd. In May 2022, it bet $750 million via its credit funds on billionaire Gautam Adani-led diversified conglomerate Adani Group's Mumbai airport unit. In 2023, it invested Rs 200 crore ($24.2 million) in real estate developer Anant Raj Ltd via non-convertible debentures. Earlier this year, it struck another private credit deal with the Adanis.

Last year, Apollo monetised its investment in Jyoti Structures and sold most of its stake in broadcasting services firm PlanetCast Media Services Ltd. Meanwhile, AION's high point came four years ago when it exited BPO firm IGT Solutions, logging strong returns.

Apollo also recently signed off from JSW Cement, a company it backed less than five years ago along with former ArcelorMittal honcho Sudhir Maheshwari's Synergy Metals Investment Holding. Part of the billionaire Sajjan Jindal-led JSW Group, JSW Cement manufactures cement, clinker and related products.

Apollo has been undergoing a transformation in India, with its local head Utsav Baijal having moved to Bain Capital to head its special situations investment business in the country.

Published by HT Digital Content Services with permission from VC Circle.