After cement, Adani, Birla will now clash in this business sector, the market is worth Rs 80,000 crore

Adani Group led by billionaire industrialist Gautam Adani and Aditya Birla Group of Kumar Mangalam Birla are now ready to face each other in the wire and cable business after cement. Both the groups have announced their entry into this sector with double-digit growth. In less than a month, both the groups have announced their entry into the wire and cable sector. Due to the competition between these two groups, small companies in the cement sector have already been left far behind. At the same time, unorganized and small companies dominate the wire and cable industry.

Competition expected to intensify

With the entry of two big groups in this sector, competition in the wire and cable industry is expected to intensify. The sector has registered a growth of 13 per cent year-on-year in revenue between FY 2018-19 and 2023-24. The sector is now moving towards an organized brand market. Shares of listed wire and cable companies have fallen a day after the Adani Group announced its entry into the sector on March 19. Shares of leading companies in the sector, Polycab India and KEI Industries, hit a 52-week low on March 20. Havells also fell by five per cent. Finolex Cables also fell by four per cent the next day. Describing wire and cable as an ‘ideal sector for new entrants with deep pockets’, JM Financials said it is an industry where no single company has more than 15 per cent share in the wire business and 20 per cent in the cable business.

Already 400 companies in this sector

The industry comprises about 400 companies, ranging from SMEs to large enterprises, with revenues between Rs 50 and Rs 400 crore. According to global brokerage firm Jefferies, India’s wire and cable industry worth about Rs 80,000 crore (cables Rs 56,000 crore and wires Rs 24,000 crore) has “attractive opportunities”. Jefferies analysts said, “There is ample room for new players in the wire and cable industry as it is growing in double digits and 30 per cent of the industry is still held by the unorganized sector. The size of the industry will reach Rs 1,30,000 crore in the year 2028-29.”

Demand for cables remains strong

Motilal Oswal Financial Services said the long-term growth outlook remains stable with demand for wires and cables remaining strong. Adani Enterprises, through its subsidiary Kutch Copper Limited (KCL), formed a joint venture earlier this month called Pranita EcoCables in partnership with Pranita Ventures to manufacture and sell metal products, cables and wires. The move comes nearly a month after Aditya Birla Group flagship UltraTech Cement on February 25 announced to expand its reach in the construction value chain through the wires and cables segment with an investment of Rs 1,800 crore over the next two years.