FEC RESEARCH
India's AI
Data Centre
Revolution
An Investment Prospectus for a High-Growth
Digital Future
October 2025
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India’s AI Data Centre Revolution FEC RESEARCH
Foreword
Sandeep Menon
Vice President
FEC SPIT
Data centres are at the forefront of India’s digital revolution.
They serve as a foundation of the digital infrastructure and
help drive economic growth by fostering innovation and
collaboration.
In the coming years, India is expected to see a substantial
increase in DC capacity, with a significant focus on both
scaling infrastructure and adopting sustainable practices.
The growth in AI-led demand is a critical driver, with AI
technologies requiring vast amounts of data storage,
computational power, and connectivity. This shift will
transform the industry, creating new opportunities for
innovation and challenging data centres to adapt to ever-
expanding requirements for speed, efficiency, and security.
This report provides a comprehensive analysis of the current
landscape of India’s data centre industry, examining existing
DC supply, future growth trends, key players and insights on
the market.
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India’s AI Data Centre Revolution FEC RESEARCH
The Unprecedented Market
Opportunity in India
India's data center market is no longer an emerging
opportunity. It is a foundational pillar of one of the
world's fastest-expanding digital economies. The
explosive growth in data consumption, coupled with a
nationwide push for digitalization, has created a
structural demand for digital infrastructure that is both
massive and accelerating. This report quantifies the
sheer scale of this market, its projected growth
trajectory, and the foundational drivers that are
coalescing to create a generational investment
opportunity.
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India’s AI Data Centre Revolution FEC RESEARCH
Global Overview : Data Centres
Data Centre Market Size (USD Billion)
CAGR CAGR 2019 2024 2030E 2034E
Global DC Snapshot 2019 2024 2027E
(2019–24) (2024–27) 1200
Global Installed
20 42 65 16% 15%
Capacity (GW) 1000
CAGR
– Americas 9 21 29 17% 12% 10%
800
– APAC 5 12 23 18% 24%
600
– EMEA 5 10 13 14% 11%
400
Global Vacancy 12% 8%
200
DC capacity across regions grew at 16% CAGR over last five years;
0
APAC capacity growth would be highest over next five years 2019 2024 2030E 2034E
Source: Cushman & Wakefield, JLL, Precedent Research 4
India’s AI Data Centre Revolution FEC RESEARCH
India Overview : Data Centres
Centers
Pan India upcoming supply
2887 MW of upcoming supply is expected by 2030 and this includes both colo supply and greenfield facilities
by hyperscale cloud service providers. 2887 MW of upcoming supply comprises 638 MW (under construction)
and 2249 MW (planned). Mumbai is expected to account for the majority of upcoming supply in the next 5
years followed by Hyderabad, Chennai and Delhi NCR.
Source: Cushman & Wakefield, Industry, FEC Research 5
India’s AI Data Centre Revolution FEC RESEARCH
City Wise Break-up of operational capacity
Mumbai accounts for 46% of Data Centres in India
Mumbai
Chennai
Delhi NCR
Bengaluru
Hyderabad
Pune
Kolkata
Others
0 10 20 30 40 50
Source: Cushman & Wakefield, FEC Research 6
India’s AI Data Centre Revolution FEC RESEARCH
Architecture of a Data Centre
SERVER
Source: ACS 7
India’s AI Data Centre Revolution FEC RESEARCH
Types of Data Centres Data Centre Stack
Data centers provide the physical infrastructure for IT hardware,
TIER 4 supporting enterprise computing and storage. Besides the building,
they require fiber connectivity, dependable power, and cooling. With
TIER 3 cloud adoption, many businesses now lease data centers instead of
owning them. Data center operators rent out critical infrastructure,
while Cloud Service Providers equip these centers with IT hardware
TIER 2 to serve their clients, either by owning or leasing the facilities.
TIER 1
Source: FEC Research, Jefferies 8
India’s AI Data Centre Revolution FEC RESEARCH
Data Centre Value Chain
Mapping the listed players!
LV Power
Distribution
Server Cabinets
HV Power IT Infra
Distribution
Back up
Power
Uninterruptable HVAC
Power solutions COOLING
SOLUTIONS
Security
Systems
Automation
Systems
Source: FEC Research 9
India’s AI Data Centre Revolution FEC RESEARCH
Growth Drivers for Data Centres in India
Data, data and more data!
Explosive rise in data consumption Changing nature of data
Mobile broadband subscribers up 4x since 2016 to Streaming, gaming, AI, social media,
898 million (2024). and e-commerce boosting data intensity
(AI = 3–5x more compute).
5G rollout
Government digitization push
Expanding 5G networks driving surge in data usage
Accelerating data creation and storage
(40GB/user/month for 5G).
demand.
Policy & Infrastructure Support
Several states including Uttar Pradesh, Tamil Nadu, The National Data Centre Policy The Digital Personal Data Protection Act
Andhra Pradesh, Telangana, Karnataka, and West 2020 (draft) proposes Data Centre 2023 reinforced data security and privacy,
Bengal have introduced dedicated data centre policies Economic Zones (DCEZ) and established a Data Protection Board, and
offering capex support, single-window clearances, recognition of DCs as essential imposed stricter penalties for breaches. The
stamp duty and electricity duty exemptions, and services. The Union Budget 2022 2023–24 Budget also announced Data
subsidies on lease rentals, along with incentives for granted infrastructure status, enabling Embassies for nations seeking digital
renewable energy usage. easier long-term financing. continuity solutions.
Source: FEC Research, C&W Research 10
India’s AI Data Centre Revolution FEC RESEARCH
Growth Drivers for Data Centres in India
Technology & Global Interest
AI as a key enabler Private equity inflows
Surge in GPU-based workloads, AI-ready Large investments (e.g., Kotak,
DCs under IndiaAI Mission (₹10,300 Cr). Brookfield, Mindspace, etc.) into data
Hyperscalers expanding footprint infrastructure.
Reliance, Adani, Digital Realty, Equinix, Emerging as global data hub
Princeton Digital, etc. Lower costs, strong digital ecosystem,
renewable energy leadership.
Cloud & Localisation Trends
Cloud Low latency Policy push for
preference demand localisation
Enterprises shifting from Local deployment for better RBI and DPDPA mandating
captive to third-party DCs. application performance. domestic storage of sensitive data.
Source: Industry, DPDPA 2023, FEC Research 11
India’s AI Data Centre Revolution FEC RESEARCH
Foundational Policies Driving Demand
Data Localization Mandates
Regulations from the Reserve Bank of India (RBI) for the financial sector and the landmark
Digital Personal Data Protection (DPDP) Act of 2023 compel companies in critical sectors
like BFSI, e-commerce, and healthcare to store Indian user data within the country's borders.
This creates a captive and legally mandated demand for domestic data centers.
Infrastructure Status given to DCs
The government's decision to grant "Infrastructure Status" to the data center sector is a
pivotal policy move. This designation allows developers to access long-term, lower-cost
credit from financial institutions and simplifies the process of attracting foreign investment,
directly improving project viability.
IndiaAI Mission
This flagship USD 1.2 Billion initiative is designed to build sovereign AI capabilities. A key
component includes a landmark public-private procurement of up to 29,000 GPUs, a figure
that underscores the scale of national ambition. This hardware will be leased to Indian
startups and researchers through a GPU-as-a-Service model, catalyzing domestic AI
innovation and creating direct demand for the infrastructure to host it.
National Data Centre Policy 2025
This proposed policy signals a clear long-term vision. Key proposals include a potential tax
holiday of up to 20 years for data center developers and the extension of GST input tax
credits for critical capital assets like cooling systems and electrical equipment. If enacted,
these measures would significantly enhance project economics and returns.
Source: FEC Research, Financial Express 12
India’s AI Data Centre Revolution FEC RESEARCH
Listed Companies in our radar: India
Global Data Centres Data Centre Government Data High-Performance Hyperscale Data
& Cloud Connectivity Infrastructure & Centres & Cloud Computing & AI Centre Infrastructure
Development Services Systems
Data Centre AI-Focused Cloud Power & Automation EPC & Power Data Centre
Engineering & Infrastructure Systems for DCs Infrastructure for DCs Integration & IT
Turnkey Delivery Solutions
Source: FEC Research Disclaimer: For educational purposes only. No BUY/SELL Reco. 13
India’s AI Data Centre Revolution FEC RESEARCH
Company Core Focus / Segment Key Highlights
One of India’s biggest global players. 44 data centres across 4 continents (~1M sq.
ft). Handles 30% of world’s internet routes. Connects 80% of top global cloud firms.
Tata Communications Global Data Centres & Cloud Connectivity
99.995% uptime, presence in 190+ countries. Offers WAN Ethernet, VPN, and
private lines for enterprises & telecom.
First mover in Indian DC real estate. Manesar (50 MW), Rai (200 MW), Panchkula
Anant Raj Limited Data Centre Infrastructure Development (57 MW) tech parks ready. 28 MW operational; target 300+ MW in coming years.
Focus on cost-effective, secure & low-maintenance DCs.
Operates Tier-III certified DCs in Secunderabad & Gurugram. Partners with Cisco,
RailTel Government Data Centres & Cloud Services VMware, Oracle, Microsoft, RedHat. Offers RailCloud, empaneled with MeitY.
Integrated with all major ISPs (BSNL, Jio, Airtel).
Designs supercomputing systems, DC servers & AI infra. Operates under Tyrone
Netweb Technologies High-Performance Computing & AI Systems brand. Serves IT, BFSI, Defence & Research. Focus on “Made in India” tech.
Expertise in managed cloud, migration & hybrid setups.
Global presence: 25 countries, 8,000+ clients, 4,000+ experts. Builds hyperscale
Black Box Ltd (AGC Networks) Hyperscale Data Centre Infrastructure DCs, cabling, power, networking, monitoring. Serves banking, healthcare,
government & tech sectors. End-to-end IT infra & cybersecurity.
Source: FEC Research 14
India’s AI Data Centre Revolution FEC RESEARCH
Company Core Focus / Segment Key Highlights
Offers end-to-end DC solutions — site assessment → design → construction →
maintenance. Builds modular, edge & containerised DCs with liquid cooling.
Aurionpro Solutions Data Centre Engineering & Turnkey Delivery
Serves banking, government, transport & enterprise clients. Active in AI,
cybersecurity & smart city platforms.
Provides GPU-based cloud (NVIDIA A100, H100, H200). Focus on AI/ML, NLP, CV
E2E Networks AI-Focused Cloud Infrastructure & Generative AI. Uses third-party DCs in Noida, Mumbai, Vellore. Transparent
pricing model. Not a DC builder — offers AI cloud services on top of existing DCs.
Specializes in electrical distribution & automation for DCs. Offers turnkey power
Marine Electricals (India) Power & Automation Systems for DCs setups, EMS & smart building systems. 40+ years of expertise. Provides low &
medium voltage solutions.
Core EPC firm in power infra. Provides power distribution, management &
Techno Electric & Engineering Ltd EPC & Power Infrastructure for DCs emergency systems for DCs. Plans to build 102 DCs by FY29. Strong govt &
private sector clientele.
Provides servers, storage, networking, collaboration & security. Offers end-user
Orient Technologies Data Centre Integration & IT Solutions computing & device management. Clients: Mazagon Dock, Tradebulls, Jyoti Labs,
Hindustan Motors, Dell, Coal India. Focus on turnkey DC setup & IT support.
Source: FEC Research 15
India’s AI Data Centre Revolution FEC RESEARCH
FEC Data Centre Stocks Basket
6M Return 32.7%
Source: FEC Research Disclaimer: For educational purposes only. No BUY/SELL Reco. 16
India’s AI Data Centre Revolution FEC RESEARCH
Other Key Players : Proxies
Polycab Havells KRN Heat Exchanger Blue Star Thermax
HV/LV Cables HVAC Cooling
Schneider Electric TD Power Systems HBL Engineering Kirloskar Oil Engine Cummins India
Power Backup Power
Source: FEC Research Disclaimer: For educational purposes only. No BUY/SELL Reco. 17
India’s AI Data Centre Revolution FEC RESEARCH
Comparison of different DC business models
Category Colocation Cloud Infra IaaS / PaaS Managed Services
Rent out rack space, power, Build and sell bare-metal Offer virtualized compute/storage End-to-end IT management
Description
cooling (bare shell) compute/storage/networking with orchestration and billing (IaaS) (monitoring, backup, OS, security,
Elastic billing (per vCPU, RAM,
Revenue Model Fixed rentals (Rs/MW/month) Usage-based (VM/hr, TB/month) Subscription / AMC / project-based
storage), subscription for PaaS
Build scalable digital infra, asset Compete with public and private Compete with IT services
Strategic Value Infra monetization, REIT yield play
monetization cloud offerings companies
Capital Intensity High Very High NA NA
Capex per MW Rs. 500–600 mn Rs. 800 mn – 1 bn NA NA
20–30% higher than Cloud 30–40% higher than Cloud
Max Annual Revenue per MW Rs. 80–100 mn Rs. 500–800 mn
services services
60–70% (ex electricity
EBITDA Margins % 30–40% 40–50% 25–30%
passthrough)
Payback Period 10–12 years 4–5 years NA NA
RoE Metrics Stable, low-risk yield (10–15%) Moderate (20–25%) Moderate (20–25%) Highest (25–30%)
High capex, leasing risk, rental Technological obsolescence in Margin pressure from Hyper-competition, in-house
Key Risk
pressure due to oversupply server, high capex and hyperscalers, scale disadvantage, operations, human resource
Source: Kotak MF, Industry
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India’s AI Data Centre Revolution FEC RESEARCH
The Investment Thesis: Why
India, Why Now?
Our thesis is that the Indian data center market
presents an immediate and structurally sound
investment opportunity, resting on three pillars of
conviction. The confluence of a generational digital
transformation, a paradigm shift driven by AI, and a
supportive sovereign framework makes the case for
investment clear, compelling, and time-sensitive. The
opportunity is not on the horizon; it is here now,
validated by billions in committed capital and driven
by irreversible macroeconomic and technological
trends.
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India’s AI Data Centre Revolution FEC RESEARCH
A Generational Growth Market Fueled by AI
India's digital economy is already creating immense demand for data infrastructure,
with capacity projected to grow exponentially by 2030. The AI revolution is now
layering a second, even larger wave of demand for high-density, specialized
computing on top of this foundation, creating an unprecedented, long-term growth
cycle.
A Validated Landscape with Multiple Entry Points
This market is not a speculative bet. It is a validated arena where global and
domestic leaders are deploying tens of billions of dollars. This mature ecosystem
offers diverse investment models, from high-IRR development projects and stable
core asset acquisition to high-yield enterprise services, allowing investors to tailor
their strategy to a specific risk-return appetite.
A De-Risked Environment with Strong Sovereign Support
The Indian government is a strategic partner in this growth story. Policies such as
data localization mandates create a captive demand base, while forward-looking
programs like the IndiaAI Mission and the proposed National Data Centre Policy
actively de-risk investment and enhance financial returns. This clear policy direction
is aimed at one goal: establishing India as a premier global hub for digital and AI
infrastructure.
Source: FEC Research
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India’s AI Data Centre Revolution FEC RESEARCH
Thank You
SANDEEP MENON
Vice President, Corporate Communication
Email : sandeepmenon166@[Link]
Mobile : +91 99672 60389
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