Shares of major players in the cables and wires segment fell sharply on March 20, 2025, following Adani Group’s announcement of its entry into this competitive industry through a newly formed joint venture. The formation of Praneetha Ecocables Limited, a 50:50 partnership between Adani's wholly-owned subsidiary Kutch Copper Limited and Praneetha Ventures, has caught the attention of investors, leading to significant declines in the stock prices of established companies like Polycab India, Havells India, and KEI Industries.
The details of the joint venture were disclosed in an exchange filing by Adani Enterprises, which stated, "Kutch Copper Limited has completed the incorporation process of a joint venture company, namely PRANEETHA ECOCABLES LIMITED, with Praneetha Ventures Private Limited." The joint venture is set to engage in the manufacturing, marketing, distribution, buying, and selling of metal products, cables, and wires, marking a notable entry into a sector presently dominated by established players.
On this day, shares of KEI Industries plummeted to a low of ₹2,802.10, reflecting a staggering 14.55% drop, as stock traders reacted to the news. Polycab's shares also felt the pressure, closing at a decrease of 7.8% to ₹5,015.60, while Havells India's stock fell by 5.4% to ₹1,470.8. The overall mood in the market suggested a critical concern regarding the heightened competition as Adani becomes the second major conglomerate to enter the cables and wires sector; the Birla Group made a similar announcement less than a month prior.
Analysts note that the resultant stock market turmoil stems from fears of intensified competition affecting incumbents, but also an overarching concern about rising copper and aluminum prices impacting raw material costs. "The cable and wire industry needs distribution channels to be largely built afresh for wires; and approvals from several customers... may take six-24 months," explained analysts from Nuvama Institutional Equities. This viewpoint emphasizes that while the competition is set to grow, the structural changes and the time needed for new entrants to gain a foothold in the market will mitigate immediate risks to existing players.
The birthing of this new venture comes at a time when copper prices have surged above $10,000 per ton, the highest in months, attributed partially to geopolitical factors, including supply chain issues and tariffs. Since the start of 2025, copper prices on the London Metal Exchange have risen approximately 14%, while aluminum prices have also seen significant increases, prompting concerns over elevated production costs for cable manufacturers.
Despite these challenges, experts analyze that the cables and wires market in India, valued at approximately ₹80,000 crore at the end of FY24, has room for growth. The industry is expected to thrive, driven by expanding demand for electricity, telecoms, and infrastructure development in a rapidly urbanizing Indian landscape.
As anticipation around this joint venture builds, market participants are keenly watching the response from existing players and any subsequent strategic moves by Adani and Praneetha. According to industry analysts, the entrance of larger players like Adani and Birla into the segment will likely drive a shift from unorganised to organised market shares, with the blend of financial backing and capacity for innovation potentially transforming the market dynamics in the coming years.
Going forward, investors will need to stay alert to the evolving landscape in the cables and wires industry, as both Adani and Birla aim to establish their presence and influence in what has proven to be a lucrative segment. With existing players adjusting their strategies amidst these new developments, the ongoing trend in share prices will be a critical indicator of the sector’s robustness.
