Data Centre Capacity to Jump Six Fold In 6 Years
Around 4,900-5,000 MW of data centre capacity, involving investments of around Rs 1.5 trillion, are likely to be added in the next six years, according to ICRA. This is a six-fold increase from the current capacities. Data localisation and data explosion are leading to data centre revolution in India. To cater to the increasing demand, Indian corporates like the Hiranandani Group, the Adani Group and Reliance Industries; foreign investors like Blackstone, CapitaLand, Princeton Digital Group; captive consumers like Amazon, and Microsoft have started investing in Indian data centre market. Along with them, existing players like NTT, CtrlS, Nxtra, STT India are also expanding their capacities. “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 user base for social media, gaming, e-commerce and OTT platforms. This, coupled with favourable regulatory policies like 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 investments in the country,” said Anupama Reddy, Vice President and Co-Group head (corporate tings), ICRA. According to the ratings firm, Mumbai, Hyderabad and NCR will account for 70-75% of the installed data centre capacity. Additionally, given the ESG considerations for most of the key tenants, data centre players are also expected to invest in green power to meet their power requirements. The industry revenues are expected to increase at a CAGR of around 17-19% during FY23-FY25 versus 24.5% CAGR growth during FY18-FY22. This will be supported by an increase in capacity utilisation and ramp up of new data centres. With increase in revenues and better absorption of fixed costs, operating margins are likely to improve and remain in the range of 43-45% during next three years.
Tags : data centre capacity investments ICRA Hiranandani Group the Adani Group Reliance Industries