Polycab, Havells, and KEI Shares Drop Up to 13% as Adani Enters Cables and Wires Market

The stock prices of major cable and wire manufacturers, including KEI Industries, Polycab, and Havells, saw a sharp decline on March 20 following the Adani Group’s announcement of its entry into the sector through a newly formed joint venture, Praneetha Ecocables.

Adani’s Entry Shakes Up the Market

In a post-market exchange filing on March 19, Adani Enterprises, the flagship company of the Adani Group, revealed that its wholly owned subsidiary, Kutch Copper, had finalized the incorporation of a joint venture named Praneetha Ecocables Limited. Both Kutch Copper and Praneetha Ventures will hold an equal 50% stake in the newly established company.

This joint venture will focus on the manufacturing, marketing, distribution, and sale of metal products, cables, and wires. Following the announcement, Adani Enterprises' share price traded in positive territory during early trading on March 20, reaching ₹2,326 per share.

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Industry Impact and Competitive Pressure

Adani’s foray into the cables and wires sector is expected to intensify competition, particularly for industry leaders like Polycab, KEI Industries, and Havells. With its vast financial resources and experience in infrastructure and power-related businesses, Adani Group could leverage economies of scale, thereby exerting pricing pressure on existing players.

Adding to the competitive landscape, this development comes shortly after the Aditya Birla Group announced that UltraTech Cement would also be entering the segment. The company plans to establish a wires and cables manufacturing plant in Bharuch, Gujarat, with an investment of ₹1,800 crore over the next two years.

Stock Market Reaction

As a result of these developments, several leading companies in the segment saw sharp declines in their stock prices:

Polycab’s share price witnessed a nearly 9% drop, trading at ₹4,972 per share on March 20. This decline came after the stock had surged by nearly 5% the previous day, closing at ₹5,438.40. Over the past year, Polycab’s stock has fallen more than 32%.

KEI Industries share price fell over 13%, trading at around ₹2,855.15 per share. The stock has been under pressure, having hit a 52-week low of ₹2,902.85 in February. Over the last year, it has declined by nearly 36%.

Havells' share price declined over 5%, trading at ₹1,479 per share. This came after a notable increase the previous day, driven by the government’s exemption of key components from mandatory BIS certification, alleviating supply concerns. Over the past year, Havells’ stock has fallen by 12%.

RR Kabel share price fell nearly 2%, trading at ₹903 per share. This followed the stock hitting a 52-week low of ₹854 the previous day. Over the past year, RR Kabel has declined by over 37%.

What’s Driving the Sell-off?

The sharp decline in stock prices of leading cable and wire manufacturers can be attributed to several factors:

• Increased Competition – With Adani Group and UltraTech Cement entering the segment, existing players fear market share erosion and margin compression.
• Investor Concerns Over Pricing Pressure – Adani Group’s track record of aggressive expansion could lead to a price war, affecting profit margins of existing firms.
• Broader Market Trends – The overall stock market has been volatile, with investors becoming more cautious amid macroeconomic uncertainties and inflation concerns.

Looking Ahead

Despite the short-term sell-off, the long-term demand for cables and wires remains strong, driven by infrastructure development, electrification projects, and rapid urbanization. Industry leaders like Polycab, KEI Industries, and Havells are expected to innovate, expand production, and diversify product offerings to maintain their market position.

Investors will be closely watching how Adani’s Praneetha Ecocables and UltraTech’s entry impact pricing strategies, demand dynamics, and overall industry growth in the coming months.