Carlyle invests $235m in Bharti Airtel's India data center unit

The investment gives Nxtra an enterprise valuation of approximately $1.2 billion. Carlyle will hold a 25% stake with Airtel retaining 75%. The new capital will be used to support the expansion of Nxtra’s infrastructure and services nationwide. Headquartered in Delhi, it is currently building new facilities in Pune, Chennai, Mumbai, and Kolkata.

The company already has a portfolio of 10 large data centers and 120 edge data centers that offer co-location, cloud infrastructure, managed hosting, data backup, disaster recovery, and remote infrastructure management services. Clients range from multinationals to small and medium-sized enterprises (SMEs) to government agencies.

For the 12 months ended March 2019, Nxtra generated INR8.8 billion ($116.5 million) in revenue and a net profit of INR473 million. It is part of the Airtel Business division – alongside fixed-line voice, network integration, video, mobility and digital media services aimed at enterprises – that delivered INR124.5 billion in revenue.

“We have built a robust data center portfolio that is future-ready and scalable. For us, the security and data privacy requirements of our customers are our top priorities, which we have established as a key differentiator for our data center offerings. Rapid digitization has opened up a massive growth opportunity for data centers in India and we plan to accelerate our investments to become a major player in this segment,” Gopal Vittal, CEO for India and South Asia at Airtel, said in a statement.

Data center growth in India is driven by businesses moving their IT infrastructure to the cloud and rising consumer demand for digital services. The government is also playing a role, notably through a data localization policy requiring companies that collect critical information on consumers to store and process it within Indian borders. This is behind the need for more hyperscale data centers.

Structure Research, an independent consulting firm focused on cloud and data center infrastructure, projected that India’s data center capacity would reach 536.1 megawatts by 2024, up from 252 MW in 2019. Colocation services revenue is expected to rise from $730 million to $2 billion.

Several private equity-backed data center providers are building pan-Asian portfolios, among them Warburg Pincus’ Princeton Digital Group, Bain Capital’s ChinData, and AirTrunk, which was recently acquired by Macquarie Infrastructure & Real Assets (MIRA). However, only ChinData currently has assets based in India.

Carlyle – which has previously invested in data centers in the US and Europe – has deployed more than $2.5 billion in India to date. Recent deals include the purchase of a 20% stake in Piramal Enterprises’ pharmaceutical division for $490 million and the acquisition of a majority stake in animal healthcare services player SeQuent Scientific for an enterprise valuation of $284 million.

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• Topics
• South Asia
• Technology
• Infrastructure
• Expansion
• India
• data center
• The Carlyle Group