New Delhi, Feb 27 – Shares of leading cable manufacturers, including KEI Industries, R R Kabel, and Polycab India, witnessed a sharp decline on Thursday following UltraTech Cement's announcement of its entry into the wires and cables segment. Investors reacted strongly to the news, leading to a significant market capitalization erosion in the sector.
On the Bombay Stock Exchange (BSE), KEI Industries saw a steep drop of 21.03%, R R Kabel declined by 19.92%, and Polycab India lost 18.84%. Other players in the segment also faced heavy losses, with Universal Cables falling 6.69%, Finolex Cables dropping 6.42%, Havells India slipping 6.33%, and Paramount Communications declining 5.74%. The combined market valuation of these firms plummeted by ₹2,49,840.99 crore.
UltraTech Cement’s Expansion Plan Triggers Market Reaction
UltraTech Cement, a flagship of the Aditya Birla Group, announced on Tuesday its ₹1,800 crore investment to establish a wires and cables manufacturing plant in Gujarat as part of its Building Products Division expansion. The plant, set to be located near Bharuch, Gujarat, is expected to commence operations by December 2026.
Devarsh Vakil, Head of Prime Research at HDFC Securities, commented, “A notable development affecting specific sectors was the sharp decline in wires and cables stocks, including Polycab, KEI Industries, and Havells India. This sell-off followed news that UltraTech plans to enter the segment with a significant capital expenditure commitment.”
UltraTech Cement’s Diversification Strategy
UltraTech Cement stated that the move aligns with its long-term vision to strengthen its construction value chain and establish itself as a comprehensive building solutions provider. The company aims to address growing demand for wires and cables across residential, commercial, infrastructure, and industrial sectors.
This marks yet another strategic expansion for the Aditya Birla Group, which entered the decorative paints segment last year with the launch of its Birla Opus brand.
The entry of a major conglomerate like UltraTech Cement into the wires and cables sector has raised concerns over increased competition, putting pressure on existing market leaders. Investors are likely to watch closely for further developments as the new entrant takes shape in the industry.
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