Adani and Birla Enter Cables & Wires Industry, Sparking Intense Competition
Adani and Birla Shake Up India’s Cables & Wires Industry with Bold Entries
In a surprising move that has sent ripples through India’s cables and wires (C&W) industry, two of the country’s biggest conglomerates—Adani Group and Aditya Birla Group—have made strong entries into the sector. Traditionally dominated by smaller firms and unorganised players, the C&W segment is now witnessing an intense shake-up with the arrival of these deep-pocketed giants. Within a span of one month, both groups have unveiled their ambitious plans, signaling heightened competition and potential market consolidation.
The Adani Group, through its subsidiary Kutch Copper Limited (KCL), has set up a joint venture company, Praneetha Ecocables Limited (PEL), in collaboration with Praneetha Ventures Private Limited. This move comes hot on the heels of Aditya Birla Group’s entry into the sector via its subsidiary, UltraTech Cement. With an investment of ₹1,800 crore planned over the next two years, including a manufacturing plant in Gujarat, Birla’s move is part of its broader strategy to strengthen its foothold in the construction value chain.
The Aditya Birla Group’s expansion into wires and cables aligns with its long-term vision of offering comprehensive building solutions. Following the successful launch of Birla Opus, which introduced a variety of building products like decorative paints and wood finishes, the conglomerate is now leveraging its existing businesses to fuel its latest venture. Hindalco, Birla’s copper and aluminum arm, provides a natural synergy for its wires and cables business, potentially giving it an edge over competitors. However, the sector’s dependency on copper, a raw material with volatile pricing, remains a crucial challenge.
Meanwhile, Adani’s foray into the C&W segment reflects its aggressive expansion strategy, leveraging synergies across its businesses. Just as Adani entered the cement sector by capitalizing on its coal, power, and logistics businesses, its entry into copper and now C&W follows a similar playbook. With Kutch Copper supporting Adani’s ambitions in the green energy sector, this move positions the conglomerate as a significant player in both domestic and global markets.
The impact of these high-profile entries has already been felt in the stock market. Shares of KEI Industries, a leading C&W manufacturer, plunged 14.3% following Adani’s announcement. The shockwaves were also seen in Polycab India and Havells India stocks, which fell by up to 8.5%, as investors feared increased competition. Currently, the industry is led by Polycab (20% market share), KEI (12%), Havells (8%), and KEC (6%) in the cables segment, while Finolex (15%), RR Kabel (12%), Polycab (10%), V-Guard (8%), Anchor (7%), and Havells (6%) dominate the wires segment. The fragmented nature of the industry, which consists of around 400 players with revenues ranging from ₹50 crore to ₹400 crore, makes it ripe for disruption.
The presence of conglomerates like Adani and Birla could push the industry toward consolidation. Both groups have the financial muscle to sustain a low-margin strategy, capturing significant market share over time. While this could be a game-changer for the industry, it also poses a risk—if demand fails to keep pace with the rising supply, margins could come under severe pressure. Analysts at Motilal Oswal Financial Services have warned that an overcapacity scenario could lead to a sector-wide de-rating, impacting profitability.
Despite these uncertainties, the cables and wires industry remains a high-growth sector driven by domestic and international demand. Infrastructure development, rapid electrification, power transmission expansion, and a booming real estate sector are fueling robust growth in the domestic market, projected to grow at an 11-13% CAGR from FY24 to FY27. India’s increasing role as an exporter, supported by initiatives like the China+1 strategy and production-linked incentives (PLI), further strengthens the industry’s outlook.
A notable trend shaping the sector is the shift from unorganised to organised players. The market share of organised players has grown from 68% in FY19 to 73% in FY24 and is expected to rise further. Analysts at Nuvama Research estimate that industry capacity utilization will reach 60-70% over the next three years, driven by the expansion of distribution networks and regulatory approvals for various cable products. However, despite the entry of new players, the additional capacity is expected to account for only 5% of the total market, meaning the overall impact on the industry’s volume and profit margins may be limited in the medium term.
With the cables and wires sector at the center of India’s industrial expansion, the entry of Adani and Birla marks a new chapter of heightened competition, strategic maneuvering, and potential consolidation. The industry’s future will depend on how well existing and new players adapt to the evolving landscape.
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