Data centres in India to attract investments worth Rs 1.5 lakh cr in next 6 years: ICRA

New Delhi, Feb 22 (KNN) According to credit rating agency ICRA report published on Tuesday, India's rising demand for data localisation could lead to an investment of Rs 1.5 lakh crore and the creation of 4,900-5,000 MW of capacity over the next six years.

ICRA pointed out that the industry revenues are expected to increase at a CAGR of around 17-19 per cent during FY2023-FY2025, supported by an increase in capacity utilisation and ramp-up of new data centres.

“The sector will witness a six-fold increase in capacities in the next six years, with Mumbai, Hyderabad and Delhi-NCR set to account for 70-75 per cent of the installed DC capacity," said Anupama Reddy, Vice President and Co-Group Head, Corporate Ratings, ICRA.

Witnessing an increasing demand in the sector, corporate giants like Hiranandani Group, the Adani Group (in JV with EdgeConnex), the Reliance Group and foreign investors like Blackstone, CapitaLand, Princeton Digital Group (PDG) and Big Tech firms like Amazon and Microsoft have already begin to pour in heavy investments in data centres.

Currently, Mumbai and Chennai have maximum landing stations, with the former being the preferred location for a data centre operator. Other top destinations include Hyderabad and Pune.

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 and 5G, etc), growing user base for social media, gaming, e-commerce and OTT platforms.

"This, coupled with favourable regulatory policies, providing infrastructure status to data centres, special incentives 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 data centre investments in the country," Reddy explained.

Data centre players will also begin to invest in green power to meet their power requirements.  (KNN Bureau)