Polycab India Ltd., one of India’s largest manufacturers of wires and cables in terms of revenue, is planning to hit the capital markets with a primary issue.
“We have filed the draft red herring prospectus. We need growth capital and members of the promoter family and a private equity investor are planning to dilute stake,” said Inder T. Jaisinghani, CMD, Polycab India. The firm is also eyeing more business from India’s electrification drive as the demand for wire and cables as well as electrical goods are expected to grow faster. The need for wires and cables for metro rail, bullet train project and electric vehicles may is also expected to create additional opportunity for players in this sector.As per Crisil CRISIL Research, Indian wires and cables market in value terms is expected to grow at a CAGR of 15% to reach an estimated ₹1,03,300 crore by FY2023, mainly on account of government initiatives in power and infrastructure, an increase in industrial investment, a rise in consumer spending and an increase in exports of wires and cables from India.
With a 12% market share in the industry which is currently estimated at ₹52,500 crore, Polycab would benefit from these programmes, company executives said.
“Infrastructure spending by the Centre will boost growth in cables and wires as new construction activities will raise demand for elastomeric and flexible cables,” he said.
“Development in infrastructure drives growth for commercial and industrial buildings thus increasing demand for building wires and LV cables,” he added.
Demand for fire-survival cables would be supported by metro, airport and commercial real estate projects, he added.
The companyfirm, which also manufactures and sells fast moving electrical goods (FMEG) such as electric fans, LED lighting and luminaires, switches and switchgears, solar products and conduits and accessories is planning to grow this business.
“The FMEG business has potential for future growthWe want to grow and strengthen our market position in this segment in India and abroad by leveraging on brand, distribution network, diverse customer base and manufacturing capabilities,” said R. Ramakrishnan, CEO, Polycab India.
“We plan to grow our market share in existing FMEG product segments with a focus on expanding distribution reach, increasing rural penetration and greater retail expansion,” he added.
The company is focusing on manufacturing value-added FMEG that enjoy higher profit margins such as premium fans, a wider range of table, pedestal and wall fans, smart fans and lighting products in the professional luminaire segment.
It also intends to focus on street lighting and other specialised products such as domestic and agriculture pumps, domestic air purifiers and domestic water purifiers, top executives said.