Cover Story     

Published: April 30, 2025
Updated: April 30, 2025

Cable & Wire Sector Adani-Birla Entry to Change Dynamics of Rs.1,00,000 Cr. Industry

The highly lucrative Indian cables and wires sector is set for a sea change as industry giants Adani and Birla jockey for a large slice of the C&W pie, which is grow ing at a CAGR of 14 per cent on the back of rising urbanisation, the government’s infrastructure boost and a shift towards renewable energy.

Both giant conglomerates already have an inbuilt advantage with a presence in aluminium and copper production. Their entry into the sector is sure to unsettle hitherto segment leaders like Polycab, KEI Industries, Finolex Cables, Havell’s India and RR Kable.

The buzzword among analysts tracking this development is ‘forward integration’ as the two giants resort to the organic, joint venture and acquisition routes with mega-billion spends. Needless to say, the C&W pie is huge — according to ICRA report, the sector is expected to grow at 12 14 per cent, reaching a humongous Rs 1,30,000 crore by fiscal 2027.

But it won’t be easy going for the two giants as they contend with well-estab lished, albeit smaller, players like Polycab, KEI Industries, Finolex Cables, Havell’s India and RR Kable. No doubt, the new comers will disrupt the sector but will find it ex tremely difficult to dominate it.

Highly disruptive days are ahead for the Rs 1 lakh crore Indian cable and wire space, which is growing at a double digit pace CAGR on account of rising urbanisation, widespread government initiatives for rapid infrastructure development, and a distinct shift towards renewable energy. This high-voltage shake-up is thanks to the entry of two billionaire conglomerates

headed by Gautam Adani and Kumar Mangalam Birla. Their ‘ominous’ announce ments in March 2025 have the potential to rattle the sector, which is currently domi nated by specialised companies like Polycab, KEI Industries, Finolex Cables, Havell’s India, RR Kable and hundreds of unorganised players.

As far as the Adani group is concerned, Kutch Copper Ltd, a subsidiary of Adani Enterprises, has joined hands with Praneetha Ventures to form a joint venture styled Praneetha Ecocables for the manufacture of metal products, cables and wires.

In the case of the Aditya Birla group, its flagship firm Ultratech Cement announced the extension of its footprint in the construction value chain through the cables and wires segment, with an investment of Rs 1,800 crore spread over two years. Ultratech has also revealed that the plant will be set up near Bharuch in Gujarat and is expected to go on stream by December 2026. This move is a part of the Aditya Birla group’s expanding presence in the building construction business, in which it has launched a paints business under the brand name ‘Birla Opus’.

Interestingly both the Aditya Birla group and the Adanis have a presence in the copper businesses, which is the mainstay of the cables and wires industry. The Birla group’s Hindalco, an undisputed leader in aluminium and copper production, may also provide synergy to its cable and wire business.

Similarly, Adani’s Kutch Copper also provides synergy for its cables and wires business. Comment analysts at Jefferies, a well known global brokerage, “The company’s entry in this segment is part of the forward integration projects for the copper arm of AEL and possibly backward integration for the captive group transmission business. This announcement is very preliminary and the project could take 3-4 years to come on line.”

VALUE CHAIN

Now, both groups are moving towards adjacencies. Aditya Birla is expanding its footprint in the construction value chain through the cables and wires segment. With cement, decorative paints and now cables and wires, it is on track to become a complete construction solutions provider.

The Adani group entered the cement business in Sep tember 2022 after acquiring Ambuja Cement from Swiss firm Holcim for $ 6.4 billion. With this acquisition, it emerged as the second largest cement producer after the Aditya Birla group, challenging India’s top cement maker Ultratech Ce ment through a series of acquisitions and brownfield ex pansions. It has done three major acquisitions – Penna In dustries, Sanghi Industries and CK Birla group firm Orient Cement. Besides, its subsidiary ACC has acquired Asian Concrete and Cements.

Similarly, Ultratech Cement has in the last two years acquired India Cements, Kesoram Industries’s cement busi ness and the UAE-based RAKWCT to maintains its lead in the sector. The Birla group flagship firm plans to have 200 mtpa capacity by fiscal year 2027.

It will be interesting to know why the two billionaires decided to make a foray into the cable and wires industry.

WIDE OPEN

The cable and wires sector in India has historically been fragmented with approximately 400 players ranging from small and medium enterprises to large corporations, with revenues between Rs 50 crore and a whopping Rs 4,000 crore. What makes the industry particularly interesting is that no single player commands a dominant marketshare, with the largest companies holding a modest portion of the overall market.

For example, in cables Polycab leads with a marketshare of only 20 per cent, followed by KEI (2 per cent), Havells (8 per cent) and KEC (6 per cent).

On the wires front, there is Finolex (15 per cent), RR Kable (12 per cent), Polycab (10 per cent), V Guard (8 per cent), Anchor (7 per cent) and Havells (6 per cent), and a few unorganised sector players in the mix. Now, the field is wide open as two conglomerates seek growth opportuni ties.

Again, the industry has been steadily shifting from unorganised to organised players, with the organised segment’s marketshare rising from 65 per cent in fiscal 2018 to 73 per cent in fiscal 2024. This transition shows improv ing industry standards, quality parameters and operational efficiencies – factors that may attract more prominent play ers.

What is more, growth prospects for the industry are immense. According to an ICRA report, the C&W industry is expected to grow at an impressive 12-14 per cent annually from fiscal 2025 to fiscal 2027, reaching approximately Rs 1,30,000 crore by fiscal 2027.

Moreover, ICRA added that the industry is poised for substantial capital investment. Around Rs 17,000 crore capex is expected between fiscals 2025 and 2030, signal ling structural – not cyclical —demand, making it an attrac tive long-term investment opportunity.

PIVOTAL ROLE

The Indian cables and wires industry has emerged as a pivotal sector, underpinning the nation's rapid infrastruc ture and economic growth. The sector is characterised by its integral role in critical industries like power, communica tion, real estate and manufacturing. The industry's sub-seg ments, including power cables, telecom cables and special ity cables, demonstrate diverse applications and cater to a well-established value chain from raw material procurement to end-user distribution, and form the backbone of the industry's operations.

Adani and Birla have preferred to enter the C&W in dustry as it is not only growing at a fast double-digit place, but its prospects going ahead are all the more promising. According to a research study, it is expected to almost double in size from $ 8.7 billion in 2023 to $ 17 billion by 2032. The demand for cables and wires is rising because of more electrification due to rising urbanisation, and more infra structure projects due to the government thrust.

Describing cables and wires as a crucial sector driving the country's economic growth, Bhushan Sawhney, Chief Business Officer (Cable) of Polycab, points out, "Due to rapid GDP and economic growth, India will experience a power surge soon. The number of units consumed per capita has increased significantly and is expected to grow as the present government invests heavily in infrastructure development, including modern public utility facilities (airports, railway stations, etc.). These investments will recirculate and India will soon see massive growth in private real estate and infra structure construction. Several industrial corridors are being built and more industries will emerge as connectivity improves. Industries will be set up and residential projects for the working staff in these industries will be gin, in addition to the construction of commercial com plexes, small businesses, recreational facilities and other similar structures. All these new developments will sig nificantly increase the demand for electrical goods. Apart from the huge demand for quantity, several new prod uct types like BMS cables, fire survival cables and home automation solutions will be in high demand."

THIRST FOR C&W

Notes one expert, "With technology becoming in creasingly integrated, wires and cables are gaining more importance than ever before. The applications of wires and cables have increased due to growing data centres and IT facilities, ensuring secure and affordable connec tivity. Moreover, the demand for next-gen gadgets and the rollout of 5G and 6G services are acting as catalysts for the ever-growing industry."

Adds Ashish Mangal, Managing Director, Dynamic Cables, "Some of the major trends defining the growth of the wire and cable industry are the revamped distribution sector scheme (RDSS), the surge in EV charging products and accessories, and the rising export potential of the in dustry. Additionally, there will be a spurt in demand for special segments like railway cables and solar cables."

According to Abhinandan Lodha, Director (Sales) of Chandresh Cables, "There is a growing number of infrastructural development projects like the expansion of the Metro and construction of airports. Notably, we expect to see a drastic rise in investments and spending from the government and the private sector. These factors are play ing a crucial role in bringing growth opportunities in the wires and cables industry."

Interestingly, the last 25 years are probably the fastest infrastructure-growth years in India and this holds good also for the wires and cables industry. Rapid urbanisation and industrial development have contributed to the exponential growth of the electrical cable industry in the country.

NEW DRIVER

A new growth driver for the cables and wires industry has emerged in the form of renewable energy. There has been a substantial spurt in demand for cables and wires following the widespread global shift from energy through fossil fuel to renewable energy, and the Indian government's ambitious renewable energy goals, such as solar and wind power. India's solar and wind energy targets demand high performance cabling, especially in PV installations needing minimal energy loss.

In the infrastructure segment, data centres, railways, real estate, government-led electrification, and smart city projects are boosting demand for cables and wires and are expected to remain robust for the foreseeable future.

Information Technology (IT) and telecom sectors have also given a push to the growth of the cables and wires sector. Rising broadband penetration, 5G rollout and digi tal India initiatives have triggered a surge in demand for cables and wires.

Thanks to rising demand for cables and wires globally, exports have emerged as another significant growth avenue for the Indian cable and wire industry. Thanks to the good quality of Indian cables and wires, the export demand has almost doubled during the last five years - from Rs 8,322 crore in fiscal 2020 to Rs 16,765 crore for 2024, including winding wires and optical fibre cables, aided by the 'China+ 1' policy shift, production-linked incentives and rising glo bal demand for telecom, auto and renewable-focused cables.

Almost all leading companies in the cables and wires sector are doing very well. At this juncture, the entry of two conglomerates - Adani and Birla -- into the country's cables and wires sector marks a significant inflection in the industry's evolution. The development has created near-term uncer tainty which has the potential to rattle the sector, disrupting the status quo in the sector significantly.

An expert opines that the entry of the two giant players will certainly intensify competition in the industry, which has posted a 13 per cent CAGR during the five years be tween 2019 and 2024 and is migrating towards an organised, branded market.

MARKET EFFECT

This was quite evident when Adani and Birla announced their plans to enter the industry. Sensing disruption from these deep-pocket players, the share price of listed players in the cables and wires sector slumped a day after March 19 when the Adanis informed the stock exchange about their intention to enter the new field. The share price of Polycab and KEI Industries - two market leaders -- tumbled to their 52-week lows. To be specific, the price of KEI Industries slumped by 12.6 per cent, that of Polycab by 6.2 per cent, of Finolex Cable by 4.5 per cent, of Havells by 3.7 per cent, of Apar Industries by 1.5 per cent and of R R Kable by 0.20 per cent.

What will be the shape of the Indian cables and wires industry after the Adani and Birla plants go on stream? No doubt, an era of competition will start, leading to a price war. The profit margins of all players will start going down and this will administer a body blow to several unorganised players, many of whom may merge, leading to consolida tion of the industry. The number of players will come down sharply from around 400 to only 40, or still lower. As Adani and Birla have deep pockets, they will continue the price war. But the question that will come up is whether they will be able to dominate the market, as some of the existing players have been in this industry for decades and have achieved strong brand thrust, developed a wide dealer net work and are known for the quality of their products. These companies, though having a relatively small marketshare, invest in research and development and continuously strive to improve the quality of their products. Little wonder, some of them are doing very well in the export markets also. Again, some of these companies have created specialised cables such as fibre optic and fire resistant wires.

Of course, in order to stay strong and survive the stiff competition, these existing companies may strive to increase their exports. Obviously, Adani and Birla may also strive to give a boost to exports on account of their rich experience and wide contacts. Interestingly, India may emerge as a lead ing global supplier of cables and wires, and policies like the production-linked incentive (PLI) scheme could help Indian companies grow further.

CHALLENGES AHEAD

Market experts feel that despite their strong entry and their deep pockets, Adani and Birla will face severe chal lenges from the existing strong players.

According to these experts, the first major challenge will be copper price fluctuations. Of course, both of them have their own copper refineries which will be certainly an ad vantage, but global price fluctuations can still impact profits. Another challenge is the huge investment needed to build modern factories, create supply chains and establish dealer networks. Unlike cement or power, the cables and wires industry depends on strong customer relationships. Com panies like Polycab and KEI have built trust over many years with electricians, contractors and industrial buyers. It will be extremely difficult for Adani and Birla to break into this market overnight.

Again, the cables and wires market is extremely com petitive. Today, no player holds more than 20 per cent marketshare in cables and more than 15 per cent in wires. No doubt, Adani and Birla will upset the market and change the dynamics of the market, but it will take them years to dominate it.

But the positive impact of this competition will be that the Indian cables and wires industry will come of age with high-quality products, innovative products and products which can attract widespread foreign attraction. Indian can emerge as an important player in the global market.

An important by-product of this competitive marketplace will be the tough fight between Adani and Birla to secure an upper hand in the market. After cement, this will be another area where both indus try houses take on each other.

GREEN 'WAY'

The Indian wires and cables industry is poised for significant growth in the coming decade, sup ported by transformative eco nomic, technological, and regula tory trends. The sector's projected compound annual growth rate (CAGR) of 7.87 per cent from 2024 to 2032 reflects its expand ing market opportunities, driven by urbanization, digitization, and renewable energy adoption. Initiatives like the Smart Cities Mission, BharatNet, and India's 500 GW renewable energy target by 2030 will catalyze de mand for specialized cables, including optical fibre and so lar cables.

Global trends, such as the transition to electric vehicles and the rise of smart homes, are expected to further fuel demand for high-quality and innovative wiring solutions. Indian companies that can meet these evolving needs will not only strengthen their domestic market presence but also enhance their competitiveness in global markets. Key players like Polycab India, Havells, and KEI Industries are likely to expand their export footprint by leveraging their technological expertise and economies of scale.

Additionally, the increasing focus on sustainability pre sents both a challenge and an opportunity. As regulations tighten around environmental compliance, manufacturers must inno vate to create greener production processes and products. The growth of eco-friendly cables, which have already seen a 40 per cent increase in demand over the past decade, indicates a market trend that is likely to dominate the future.

Despite potential challenges such as supply chain dis ruptions, price volatility, and competition from counterfeit products, the industry's strengths and proactive measures indicate a promising trajectory. By embracing innovation, enhancing regulatory compliance, and investing in emerg ing segments, the Indian wires and cables sector is set to solidify its position as a key driver of economic and infrastructural development. It holds the potential to con tribute significantly to India's ambition of becoming a global manufacturing hub while meeting the nation's growing en ergy and connectivity needs.