Billionaire Gautam Adani’s group and Kumar Mangalam Birla’s Aditya Birla Group are set to compete in the wires and cables industry, following their forays into the high double-digit growth sector. The industry, valued at Rs 80,000 crore, has been growing at a 13% compound annual growth rate (CAGR) between FY19 and FY24.
The entry of the two conglomerates is expected to intensify competition in the industry, which is dominated by unorganized players and smaller companies. Share prices of listed players in the wires and cable segments, such as Polycab India and KEI Industries, reported 52-week lows on March 20.
JM Financials termed the wires and cables segment as “ideal for a new entrant with deep pockets,” noting that no single player commands more than 15% share in wires and 20% in cables. The industry comprises nearly 400 players, with revenue ranging from Rs 50-400 crore.
Adani Enterprises has formed a joint venture with Praneetha Ventures to manufacture and sell metal products, cables, and wires. Aditya Birla Group’s UltraTech Cement has announced an investment of Rs 1,800 crore over the next two years to set up a greenfield plant near Bharuch in Gujarat.
Analysts at Jefferies said the company’s entry into this segment is part of the forward integration project for the copper arm of AEL and possibly backward integration for the captive group transmission business.
