India Data Centre Investments Could Touch Rs 1.5 Lakh Cr In Next 6 Years: ICRA

Credit rating agency ICRA on Tuesday said Indian could see data centre capacity to touch 4,900-5,000 MW, involving investments of about Rs 1.50 lakh crore in the next six years.

ICRA expects the data centre sector to witness a six-fold increase in capacities in the next six years, with Mumbai, Hyderabad and NCR to account for 70-75 per cent of the installed DC capacity. 

To cater to the increasing demand, Indian corporates like the Hiranandani Group, the Adani Group, in JV with EdgeConnex, the Reliance Group; foreign investors viz. Blackstone, CapitaLand, Princeton Digital Group; captive consumers viz. Amazon, Microsoft - have all started investing massively in Indian DCs. Along with them, existing players like NTT, CtrlS, Nxtra, STT India are also expanding their capacities, ICRA noted.

In a statement, Anupama Reddy, Vice President and Co-Group Head, Corporate Ratings, ICRA, said, “The key triggers for digital explosion in India are the increasing internet and mobile penetration, the Government’s thrust on e-governance/digital India, adoption of new technologies (cloud computing, IoT, 5G etc), growing userbase for social media, gaming, e-commerce and OTT platforms. This, coupled with favourable regulatory policies viz. the draft Digital Data Protection Bill 2022, providing infrastructure status to data centres, special incentives from Central and state governments like land at subsidised cost, power subsidies, exemptions on stamp duty, discounts on usage of renewable energy and procurement of IT components made locally, and other concessions are expected to boost DC investments in the country.”

ICRA in its report said that data centre Industry revenues could witness an increase in operating income at a CAGR of 17per cent to 19 per cent during FY2023 – FY202, with 43-45 per cent operating margin.