Data centre capacity to more than double to 2,100 MW by FY27: Investment Information and Credit Rating Agency (ICRA)

India's data centre capacity is projected to reach between 2,000 and 2,100 megawatts (MW) by FY27, with anticipated investments of US$ 5.95 – 6.54 billion (Rs. 50,000-55,000 crore) driven by a digital boom and data localisation initiatives, according to Investment Information and Credit Rating Agency (ICRA). Currently, the capacity stands at 950 MW, with major players such as NTT Global Data Centres, CtrlS Data Centres, STT Global Data Centres, Sify Technologies, and Nxtra Data controlling 85% of the market as of March 2024. ICRA Vice President Ms. Anupama Reddy noted that the surge in data generation and the emphasis on data localization are catalysts for a transformative shift in India's data centre landscape. Factors contributing to this data explosion include low data tariff plans, access to affordable smartphones, the increasing adoption of new technologies, and the growing user base of social media, e-commerce, gaming, and over-the-top (OTT) platforms.

Additionally, demand driven by artificial intelligence (AI) will multiply in the next three to five years, presenting significant opportunities in the sector. Approximately 95% of the existing capacity is concentrated in six cities, with Mumbai and Chennai leading the market. Mumbai contributes over 50% of the existing capacity due to its strategic connectivity and power reliability advantages. It is expected to remain a key location for future data centre capacity in India. As the demand for co-location services increases, especially from hyperscalers and sectors like banking and information technology (IT), revenues for data centres are projected to grow sharply by 23-25% YoY in FY25. Furthermore, as environmental concerns gain prominence, Indian data centre operators are expected to raise their green power investments from below 5% to an anticipated 20-25% by 2028.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.