Adani’s Entry into Cables and Wires: Impact on Market and Key Players

Market Performance

The shares of prominent cables and wire manufacturers, including KEI Industries, Polycab, and Havells, experienced a notable decline on March 20. This market movement followed Adani Group's announcement regarding its entry into the cables and wires sector by establishing a joint venture, 'Praneetha Ecocables.'

Adani Group's Entry into Cables and Wires

In an exchange filing released after market hours on March 19, Adani Enterprises disclosed that its subsidiary, Kutch Copper, has successfully incorporated a joint venture company named 'Praneetha Ecocables Limited.' The ownership of this new entity will be equally divided between Kutch Copper and Praneetha Ventures, each holding a 50 percent equity stake.

The venture will focus on the manufacturing, marketing, distribution, and trade of metal products, cables, and wires. Following this announcement, Adani Enterprises' shares showed positive movement in early trading on March 20, reaching Rs 2,326 per share.

This development follows a similar announcement by the Aditya Birla Group, whose flagship company, UltraTech Cement, recently declared plans to establish a wires and cables manufacturing facility in Bharuch, Gujarat. This initiative involves an investment of Rs 1,800 crore over two years.

Company Performance

Polycab

Polycab's share price declined by approximately 9 per cent, trading at Rs 4,972 per share on March 20. This drop occurred after the stock had risen nearly 5 per cent on March 19, closing at Rs 5,438.40. Over the past year, the stock has decreased by over 32 per cent.

KEI Industries

KEI Industries' shares witnessed a substantial decline of more than 13 per cent, trading around Rs 2,855.15 per share. The stock reached a 52-week low of Rs 2,902.85 per share in February. Over the last year, it has recorded a decline of nearly 36 per cent.

Havells

Havells' shares fell by over 5 per cent, trading at Rs 1,479 per share. Previously, the stock had shown significant gains following the government's decision to exempt essential components from mandatory BIS certification, alleviating supply concerns. Over the past year, Havells' stock has declined by approximately 12 per cent.

RR Kabel

RR Kabel shares recorded a decrease of nearly 2 per cent, trading at Rs 903 per share. This decline came after the stock hit a 52-week low of Rs 854 per share. Over the past year, the stock has dropped by more than 37 per cent.

Summary

The cables and wires sector witnessed significant stock fluctuations following Adani Group's announcement of its joint venture, 'Praneetha Ecocables.' The entry of major conglomerates into the segment has influenced market sentiment, leading to declines in the stock prices of well-known companies like Polycab, KEI Industries, Havells, and RR Kabel. This development indicates an evolving competitive landscape within the industry.