Billionaire conglomerates Gautam Adani’s Adani Group and Kumar Mangalam Birla’s Aditya Birla Group are set for another rivalry—this time in the high-growth wires and cables industry. After fierce competition in the cement sector, both groups have now announced their entry into this largely unorganised market, signaling a major shift in the industry landscape.
Market disruption?
The Indian wires and cables industry, which grew at a compound annual growth rate (CAGR) of 13 per cent from FY19 to FY24, is now transitioning toward an organised and branded market. The entry of two major players is expected to intensify competition, a concern reflected in the stock market reaction. Shares of established industry leaders such as Polycab India and KEI Industries hit their 52-week lows on March 20, following Adani Enterprises’ announcement a day prior. Additionally, Havells’ stock dropped 5 per cent, while Finolex Cables fell 4 per cent the next day.
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According to global brokerage firm Jefferies, India’s wires and cables industry is valued at Rs 80,000 crore (Rs 56,000 crore in cables and Rs 24,000 crore in wires), presenting a lucrative opportunity for new entrants. With around 30 per cent of the market still unorganised, analysts believe there is significant room for expansion. Motilal Oswal Financial Services projects the sector to reach Rs 1,30,000 crore by FY29.
Adani Enterprises, through its subsidiary Kutch Copper Ltd (KCL), recently formed a joint venture, Praneetha Ecocables, for manufacturing and selling metal products, cables, and wires. Meanwhile, Aditya Birla Group’s flagship firm UltraTech Cement announced its entry into the segment in February 2024, investing Rs 1,800 crore over the next two years to establish a greenfield plant in Gujarat.
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Both the business groups already have significant exposure to the copper business, a key raw material for cables and wires. Aditya Birla’s Hindalco is a leader in aluminium and copper production, while Adani’s Kutch Copper provides similar synergies. Business analysts predict that Adani’s entry into this segment is part of a forward integration strategy for its copper division.
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