Big worry for Kumar Mangalam Birla as after cement, copper, now Gautam Adani eyes cables and wires sectors

Adani Group had earlier entered the cement and copper business where Birla Group is already a big name. Now Adani Group has also entered the cables and wires business.

Two of the country’s largest industrial houses have entered the cables and wires (C&W) sector in the last one month with Adani Group starting a joint venture. Earlier, Aditya Birla Group entered this sector last month. Kutch Copper Limited (KCL), a wholly-owned subsidiary of Adani Enterprises, has formed a joint venture company Pranita Ecocables Limited (PEL). This company has been started in partnership with Pranita Ventures Private Limited. Last month, Aditya Birla Group company UltraTech Cement also announced its entry into the C&W sector and plans to invest Rs 1,800 crore in this sector in the next two years including a plant in Gujarat.

Adani Group had earlier entered the cement and copper business where Birla Group is already a big name. Now Adani Group has also entered the cables and wires business.

Last year, the group launched Birla Opus, entering the paint business. Birla Group’s entry into the wires and cables business is part of the company’s strategy to strengthen its position as a comprehensive building solutions provider.

From white cement to wall putty, paints and now wires and cables, the Birla Group is steadily moving ahead in the construction sector. Birla’s company Hindalco’s copper and aluminium business can help the wires and cables business. Fluctuations in copper prices have been a major problem for this sector, as it is an important raw material. Meanwhile, by entering the C&W sector, the Adani Group also wants to synergise its cement and copper business. Under this strategy, the group had also entered the cement business.

Adani Group’s coal, power and logistics business can greatly help the cement business, which is expected to reduce the cost of production of cement. Adani Group also entered the copper sector with Kutch Copper to benefit from its other businesses. Kutch Copper will help Adani Group in its ambitious green energy business. Adani Group wants to become a global leader in the copper business by taking advantage of its strong position in resource trading, logistics, renewable power and infrastructure.

Many experts say that the entry of two big and strong players can cause upheaval in the cables and wires sector. Till now, this sector was dominated by small and unorganized players. Small players are already nervous. After the announcement of Adani Enterprises, the shares of KEI Industries, the largest company in this sector, fell by 14.3%. This stock led to a decline in the entire sector. Investors fear that the entry of Adani Group will increase competition. Therefore, the shares of Polycab India and Havells India also fell by up to 8.5%.