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UAE-based manufacturing giant plans investment in India's wire, cable industry as economic activities pick up

The upcoming general elections and increased government spending on infrastructure projects are expected to further boost demand. However, fluctuating commodity prices may impact future growth.

Edited By: Nitin Kumar @Niitz1 New Delhi Published on: October 22, 2023 7:32 IST
BSE
Image Source : PEXELS A worker working in a factory.

The domestic cable and wire industry is the focus as volumes have picked up with the recovery in the construction and infrastructure activities post-pandemic. With the general elections less than 7 months away, the increased spending on infrastructure projects by the government will further push the demand. However, the volatility in commodity prices may cap the volumes going forward. The communication cables industry has also started witnessing pickup with the increase in 5G capex.

The increasing demand for renewable energy generation, aided by rising investments in distribution and transmission by industry players is expected to amplify the further growth.

Recently, homegrown Godha Cabcon & Insulation has informed exchanged through a filing that Ducab, which is one of the top cable suppliers in the world, could buy a significant stake.

Ducab is the driving force behind a broad range of advanced energy and infrastructure projects across the Middle East, Asia, Australia, the Americas, and Europe. It has steadily gained a foothold in the conductors and wires industry. 

The homegrown cable and conductor manufacturing firm caters to the power transmission sector. The development comes at a time when the wire and cables market in India has seen a sharp uptick.

The filing said that Ducab is in talks to pick around a 22.5 per cent stake. "Ducab has expressed interest in acquiring a substantial stake in Godha Cabcon. The proposed acquisition will be executed via a preferential issue," as per the filing uploaded on NSE.

According to a report, the Indian wire and cable market is growing at 15 per cent CAGR. This reflects the rapid developments in the power and infrastructure sector in the country.

The central government's PLI schemes have also helped the businesses to upscale the manufacturing. The wires and cable industry accounts for a significant 40 per cent of the electrical industry in the country.

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