Shares of cables and wires companies witnessed sharp selling on Thursday, with top players Polycab India, KEI Industries, RR Kabel, Havells India, and Finolex Cables falling up to 20%. The sell-off in the cables and wires stocks was triggered after UltraTech Cement, an Aditya Birla Group company, announced its entry into this segment.

UltraTech has proposed a capital expenditure of ₹1,800 crore over the next two years to capitalise the growing demand for wires and cables (W&C) in various sectors, such as residential, commercial, industrial, and infrastructure applications.

Weighed down by the development, Polycab India share price dropped as much as 15.6% to hit a low of ₹4,859.75 on the BSE. While KEI Industries shares nosedived 20% to ₹3,036.85, shares of RR Kabel plummeted 14% to ₹953.35 on the BSE. In a similar trend, Havells India shares declined 9.4% to ₹1,402.40, and Finolex Cables stock price dropped 5.7% to ₹845.50.

The shares of UltraTech Cement also tumbled 5.3% to ₹10,378.80 on the BSE, while its market capitalisation slipped to ₹3 lakh crore.

Meanwhile, the broader market saw muted trade, with the benchmark BSE Sensex and NSE Nifty trading flat, moving in a narrow range amid subdued cues from global peers.

UltraTech to enter cables and wires market  

In an exchange filing on February 25, the Aditya Birla Group flagpship company said that its board approved a proposal to extend its footprint in the construction value chain through wires and cables segment. The board of the company also approved a capital expenditure of ₹1,800 crore, to be spent over the next two years, which will be financed through a mix of internal accruals and borrowings. 

“The proposed entry into this segment of the construction value chain through its building products division, is in line with the company’s strategy to strengthen its position as a comprehensive building solutions provider,” the filing noted.

UltraTech proposes to leverage its extensive manufacturing expertise coupled with its connect with the end-customers to deliver high-quality wires and cables thereby targeting a higher share of the customers wallet. The plant will be set up near Bharuch in Gujarat and is expected to be commissioned by December, 2026.

"We intend to expand our presence in the construction value chain through our foray in the cables and wires segment, which aligns with our vision of providing comprehensive solutions to our end customers in the construction sector,” said Kumar Mangalam Birla, Chairman, Aditya Birla Group.

“We will continue to focus and grow our core Cement business. This year UltraTech reached a new milestone of crossing 175 mtpa of cement capacity in India and is likely to emerge as the largest cement company globally (by sales volume ex-China). UltraTech remains committed to delivering superior quality building materials and solutions that contribute to the sustainable development of a Viksit Bharat,” he said.

The company aims to meet the growing demand for wires and cables across various sectors, including residential, commercial, infrastructure and industrial applications. The wires and cables industry has witnessed revenue CAGR of around 13% between FY19 to FY24 and with the migration from the unorganised to the organised market, the outlook continues to remain robust which provides an attractive opportunity for a new trusted player in the sector.

UltraTech believes that this proposed entry in the sector is likely to be value accretive to its shareholders.

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