Adani Enterprises Ltd., through its wholly-owned subsidiary Kutch Copper Limited (KCL), has officially announced the formation of a joint venture, Praneetha Ecocables Limited (PEL), in collaboration with Praneetha Ventures Private Limited. This strategic move marks Adani's entry into the manufacturing, marketing, and distribution of metal products, cables, and wires, sending ripples through the existing market landscape.

The joint venture, incorporated on March 19, sees KCL holding a 50% equity stake in PEL. With an authorized and paid-up capital of Rs 10 lakh, divided into 100,000 equity shares of Rs 10 each, PEL is poised to leverage the combined expertise and resources of both partners to establish a strong foothold in the sector. The registration of Praneetha Ecocables Limited with the Registrar of Companies, Ahmedabad, formalizes this partnership.

The entry of major conglomerates into the wires and cables sector is not limited to Adani Enterprises. Aditya Birla Group, through its flagship company UltraTech Cement, announced a substantial investment of Rs 1,800 crore over the next two years to establish a presence in this domain, including setting up a plant in Gujarat. This move by UltraTech, India's largest cement company, reflects a broader trend of diversification and expansion within the construction value chain.

The impact of these entries is particularly felt by smaller players and even established mid-sized companies. Shares of KEI Industries, for instance, fell by 13.95%, and Havells dropped by as much as 4.46% on Thursday. Investors are expressing concerns about potential margin pressures and a de-rating of existing companies, especially given the high valuations of many stocks in the sector. The influx of significant capital expenditure from established giants like Adani and Birla is expected to intensify competition and potentially reshape the market dynamics.

Meanwhile, Adani Enterprises reported its Q3 results, showing an 8.8% decline in revenue to ?22,848 crore. EBITDA also saw a decrease of 4.8% to ?3,069.4 crore. However, margins expanded by 50 basis points to 13.4%. Increased finance costs, depreciation, and forex losses contributed to the financial results.

The formation of Praneetha Ecocables Limited represents a significant step for Adani Enterprises, signaling its intent to diversify and expand its footprint in the burgeoning metal and cable sector. The market's response, characterized by volatility and investor apprehension, highlights the potential for significant disruption and transformation within the industry.

Praneetha Ventures Private Limited, established in 2020, engages in trading consulting and is diversifying into "green manufacturing."