SMALLCAP World Fund Reduces Stake in KEI Industries

Introduction to KEI Industries

KEI Industries, formerly known as Krishna Electrical Industries, is a significant player in the Indian cable and wire industry. The company manufactures and markets a variety of power cables, including low-tension, high-tension, and extra-high voltage (EHV) cables. Additionally, KEI produces house wires and stainless-steel wires, serving sectors such as power, oil refineries, railways, automobiles, cement, steel, fertilizers, textiles, and real estate.

Manufacturing Facilities

KEI operates five manufacturing facilities located in Bhiwadi, Chopanki, and Pathredi in Rajasthan, and Rakholi and Chinchpada in Silvassa. Moreover, the company has two plants for backward integration of PVC compounds in Harchandpur (Rajasthan) and Dapada (Dadra and Nagar Haveli and Daman and Diu). KEI also offers forward integration through EPC (Engineering, Procurement, and Construction) services for power distribution, transmission, and sub-station projects.

Diversified Revenue Profile

KEI’s revenue is well-diversified across different segments. In the fiscal year 2024 (FY24), the cables and wires segment contributed around 62% to the total sales, followed by the EPC segment at 29%, and the stainless-steel segment at 7%. The remaining 3% came from other segments. KEI holds a reasonable market share, with 6%-7% in the retail market and 12%-13% in the institutional market. Notably, KEI dominates the domestic market with a 25% share in the oligopolistic 400 EHV cable segment.

Recent Share Performance

Despite market selling pressure, KEI’s shares rose by 2% on Tuesday. The share price opened at Rs 4,495, found support at the 20-day moving average (20-DMA) of Rs 4,466, and is currently trading near its day high.

Stake Reduction by SMALLCAP World Fund

In a significant recent development, SMALLCAP World Fund, Inc. reduced its stake in KEI Industries. On June 28, the fund sold 2.02% of its stake, bringing its total holding to approximately 3%. Despite this, KEI’s share price has shown impressive growth, gaining 41% in 2024.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions