India's Data Centre Industry Enters IPO Phase Amid AI-Driven Expansion
India's data centre sector is undergoing a significant transformation as companies increasingly turn to public market listings and joint ventures to fund their ambitious growth plans. This strategic shift comes at a time when surging demand for artificial intelligence-ready infrastructure is dramatically increasing capital requirements, pushing operators to seek larger funding pools for expansion.
Major Players Eye Public Markets
The industry's move toward public offerings gained momentum last week when Sify Infinit Spaces Ltd became the country's first pure-play data centre company to receive regulatory approval for a ₹3,700 crore initial public offering. Of this substantial amount, ₹1,325 crore has been specifically earmarked for capital expenditure dedicated to expanding its data centre infrastructure.
Yotta Infrastructure has revealed plans to pursue a domestic stock market listing before considering US capital markets, marking a reversal of its earlier strategy. According to Sunil Gupta, the company's chief executive officer, Yotta could approach Indian markets as early as the next financial year, depending on execution timelines. The Mumbai-based operator, which manages large data centre campuses in Navi Mumbai and Noida, had previously secured approvals for listing its US parent entity through a merger with a special purpose acquisition company.
Bharti Airtel's Nxtra Data Ltd is also reportedly considering a potential listing as scaling operations becomes increasingly crucial amid intensifying competition from industry giants Reliance Industries Ltd and Adani Enterprises Ltd. Industry analysts estimate that the Carlyle-backed firm could be valued close to $3 billion, with Bharti's stake potentially worth over $2 billion.
CtrlS Datacenters Ltd, recognized as Asia's largest top-rated data centre operator in terms of fault tolerance, has also expressed interest in pursuing a public listing to meet its growing capital expenditure requirements, according to chairman Sridhar Pinapureddy's statements from 2025.
Structural Drivers Behind IPO Momentum
Narendra Solanki, head of fundamental research-investment services at Anand Rathi Share and Stock Brokers, explained the fundamental drivers behind this trend. "As one of the world's most populous nations with a high density of mobile users, India has experienced a structural shift toward data-heavy platforms," he noted. "Consequently, establishing and expanding local data centres is no longer optional but rather a competitive necessity to service these needs efficiently."
Solanki emphasized that "the business model for data centres is notoriously capital-intensive" and that "IPOs will increasingly serve as effective methods for these businesses to quickly raise the necessary capital to expand domestic footprints."
Rohan Rao, partner at KPMG India, highlighted additional factors making data centre businesses attractive IPO candidates. "With rising hyper scaler demand, supportive government policies, and growing investor appetite for yield-generating assets, they offer predictable growth and scalability that public markets are well positioned to reward," he stated.
Industry Growth and Global Positioning
According to an October 2025 joint report by Lattice Technologies and Cushman & Wakefield India, the country's data centre industry has grown at an impressive annual rate of 25.47% from 2021 to 2025. This remarkable growth places India among the fastest-growing data centre markets by capacity in the Asia-Pacific region.
However, when benchmarked against global leaders, India's data centre industry remains at a relatively early stage of development. The United States boasts a built capacity nearly 18 times greater than India's, while China's capacity is approximately 3.5 times larger. Currently, India aligns more closely with the third tier of global markets, sharing built capacity ranges of 1.3 to 1.6 GW with countries such as Japan, Australia, and Canada.
The report reveals that India's under-construction and planned data centre capacity over the next five years stands at approximately 2.7 GW, representing investments up to $20 billion.
Beyond IPOs: Joint Ventures and Strategic Partnerships
The funding landscape extends beyond public offerings, with significant joint venture activity shaping the industry's future. In November 2025, India witnessed $60 billion worth of total announcements in the data centre sector, with nearly $53 billion coming from major players including Reliance Industries, Larsen and Toubro, the Adani and Tata groups, and technology giants Google, Amazon, and Microsoft.
Notable developments include:
- Digital Connexion, Reliance Industries' joint venture with Brookfield and Digital Realty, announcing an $11-billion investment over five years to establish a 1 GW data centre in Visakhapatnam
- L&T planning to invest nearly $2.5 billion over five years to establish five data centres with net capacity of at least 300 MW
- Google and Adani Enterprises partnering to develop India's largest AI data centre campus in Visakhapatnam, valued at approximately $15 billion over five years
Manisha Girotra, chief executive at Moelis & Company's India branch, provided insight into this trend. "Large Indian players are currently leading the data centres race because the initial phase is largely a 'land game,' but the future will be defined by partnerships and joint ventures," she explained. "This is a sector that requires a combination of both local and global expertise. While domestic firms provide the land, scale, and infrastructure, global players bring the necessary AI capabilities."
Girotra further predicted that "you should expect to see a lot of activity through these joint ventures, particularly among large-cap companies."
Future Outlook and Data Sovereignty Considerations
Looking ahead, rising concerns over data sovereignty are expected to drive increased demand for locally stored data, potentially positioning India as a leading player in the global data centre industry. The combination of supportive government policies through initiatives like Digital India, rapid adoption of data-intensive platforms, and growing investor interest in infrastructure assets creates a favorable environment for continued expansion.
The industry's evolution from private funding to public markets and strategic partnerships reflects its maturation and the increasing scale of operations required to meet India's growing digital infrastructure needs. As artificial intelligence applications become more pervasive and data consumption continues to rise, the data centre sector's importance to India's economic and technological development will only intensify, making its funding strategies increasingly critical to national digital ambitions.
