Adani’s Entry into Cable & Wire Sector Triggers Sharp Decline in Industry Stocks
Adani Group’s entry into the cables and wires industry through its joint venture, Praneetha Ecocables, triggered a sharp sell-off in shares of major players like KEI Industries, Polycab, and Havells on March 20. KEI Industries fell 12%, Polycab dropped 8%, and Havells declined over 4%. This follows UltraTech Cement’s recent announcement to enter the same sector. Industry leaders believe new entrants will take years to establish themselves, but investor concerns persist. Despite reassurances, stocks remain under pressure, with analysts cautious about the long-term impact of increased competition.
Adani’s Entry into Cable & Wire Sector Triggers Sharp Decline in Industry Stocks
The Adani Group’s entry into the cable and wire manufacturing sector has triggered a significant decline in the stock prices of major industry players. On March 20, shares of KEI Industries, Polycab, Havells, and RR Kabel fell sharply after Adani Enterprises announced its joint venture, Praneetha Ecocables, in partnership with Praneetha Ventures. This new entity will focus on producing and selling cables, wires, and metal products, marking Adani’s expansion into a new sector.
The market was further unsettled by the recent announcement from UltraTech Cement, a subsidiary of the Aditya Birla Group, which declared its own plans to enter the cable and wire industry in February. UltraTech intends to invest ₹1,800 crore in a new manufacturing plant in Gujarat over the next two years. With two major conglomerates entering the market, investors fear heightened competition could impact the profitability of existing companies.
As a result, stock prices of established players declined sharply. Polycab India’s shares dropped nearly 7% to ₹5,061.15, reversing some of the previous day’s gains. Over the past year, its stock has fallen by approximately 31%. KEI Industries suffered a steeper 10% decline, hitting the lower circuit at ₹2,954.95. Having reached a 52-week low in February, its stock has now lost nearly 34% in a year.
Havells India’s shares declined by over 4% to ₹1,495, despite a recent rally driven by government relaxation of BIS certification requirements for key components. However, the stock remains down about 11% over the past year. RR Kabel’s shares slipped nearly 3% to ₹891, following a fresh 52-week low of ₹854 the previous day, with an overall 37% decline in the last year.
Other companies in the sector also faced losses. Finolex Cables dropped 4.75% to ₹827, Dynamic Cables fell 4.3% to ₹551.30, and Plaza Wires declined 2.25% to ₹55.11.
The entry of Adani and UltraTech has raised concerns about the growth and profitability of existing firms. Investors worry that increased competition could lead to price wars, thinner margins, and market share losses for established brands such as Polycab, KEI Industries, and Havells. These fears have been reflected in the sharp stock price declines.
However, some industry leaders believe the impact will take time. KEI Industries’ CMD Anil Gupta noted that UltraTech would need at least three years to begin operations and emphasized that the market is large enough for new players. Similarly, RR Kabel’s CFO, Rajesh Jain, suggested that UltraTech’s entry may not be as detrimental as investors fear.
Despite these reassurances, the stock market remains skeptical. KEI Industries’ shares plummeted over 14% to ₹2,809.85, bringing its market capitalization below ₹28,000 crore. Polycab India’s stock fell 9.6% to ₹4,920, reducing its total valuation to under ₹75,000 crore. Havells India’s shares dropped over 5.35% to ₹1,473.65, pushing its market cap below ₹95,000 crore.
Analysts remain cautious as UltraTech’s full strategy is yet to unfold. Over the past month, Adani Enterprises’ stock has gained 6.3%, while Polycab’s shares have dropped 6%. The entry of these corporate giants has disrupted investor confidence, and while the long-term implications remain uncertain, the immediate market reaction reflects growing concerns over heightened competition.