Upcoming Data Center IPOs in India: Policy and Growth

Upcoming Data Center IPOs in India

The Union Budget 2026–27 made data centers a cornerstone of India’s technology infrastructure policy. Key incentives include a 20-year tax holiday (until 2047) for any foreign company that uses India-based data centers to provide cloud services to global customers. (Domestic cloud services to Indian customers must still be routed through an Indian reseller.) The budget also proposes a 15% “safe-harbour” margin on costs when the provider of those data center services is a related Indian company. These measures signal India’s long-term commitment: Ashwini Vaishnaw called it a “strong foundation” to make India a leading global AI/cloud hub. India already has some $90 billion in announced data center investments under way, and the new incentives aim to further accelerate this build-out.

Upcoming Data Center IPOs in India

These policy moves have ignited investor interest in Indian data centers, evidenced by a flurry of IPO plans by “pure-play” operators. For example, Sify Infinit Spaces Ltd. (the data center arm of Sify Technologies) has become the first pure-play data center company with SEBI approval for a ₹3,700 crore IPO. Similarly, Yotta Infrastructure (Hiranandani’s data center/AI platform) is planning a domestic listing in FY2026–27 after shelving an earlier U.S. SPAC route. Bharti Airtel’s Nxtra Data (backed by Carlyle) is also said to be evaluating an IPO, with a potential valuation of roughly $3 billion.

Asia’s top-rated private operator, CtrlS Datacenters, has likewise announced its intent to raise funds publicly to support a $2 billion capex plan. All told, India has entered a data-center IPO wave – a shift from earlier VC funding towards tapping capital markets to fund massive capacity expansion for AI and cloud workloads.

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Market Fundamentals for Data Centers in India

India’s data center sector is underpinned by fast-rising demand. Hyperscale cloud providers (Google, AWS, Microsoft, etc.), major tech firms, telecoms, and financial enterprises are all building out digital services and AI capabilities. A Mint analysis notes that hyperscaler-driven workloads – especially AI/GPU-intensive applications – are reviving demand after a mid-decade slowdown.

Domestic factors also support growth: India is rapidly digitizing (fintech, e-commerce, OTT media), and new local cloud providers and edge computing players are emerging. For instance, JLL reports India’s H1 2025 absorption of ~97.9 MW of new data center capacity – a 48% jump year-on-year. Despite this surge, vacancy remains extremely low (~4.3% in H1 2025), indicating a supply-constrained environment that favors operators’ pricing power.

Data center market India

On the supply side, a huge build-out is underway but still lags demand. Total installed capacity was about 1.1 GW in mid-2025. JLL projects ~2.07 GW by end-2027 (an 85% increase), requiring roughly $6.3 billion in capital investment. Industry analysts see even larger needs – Jefferies estimates India will need around $30 billion (≈₹250 thousand crore) to grow from ~1.3 GW today to 5 GW by 2030. (Kotak sees 3–3.5 GW by 2030.) The next phase of growth will be AI-driven, with high-density GPU clusters driving new “AI data centers” and campuses. By one forecast, over 80% of incremental demand in 2024–27 will come from hyperscalers and AI workloads.

At the same time, data center market India is seeing record project announcements by conglomerates and tech giants. In 2025 alone, roughly $60 billion in new data center investments were announced, of which some $53 billion came from marquee projects – for example, Reliance’s Digital Connexion JV (an $11 billion, 1 GW plan in Visakhapatnam) and Google–Adani’s $15 billion AI data center campus in Vizag. Larsen & Toubro plans $2.5 billion for five new facilities (total ~300 MW) over five years.

The CtrlS Chennai Datacenter Park itself is mid-build with two 72 MW buildings, with a second phase (DC2) targeting an additional 75 MW at Rs 5,000 crore investment. These massive projects – and many more across Mumbai, Hyderabad, Delhi/NCR and beyond – are rapidly raising India’s data center footprint.

Indian data center facility (Pi Data Center in Vijayawada), reflecting the modern campuses being built to meet rising demand.

Pricing and Leasing: While India-specific lease rate data is limited, the combination of high demand and tight supply suggests upward pressure on pricing. The JLL report highlights vacancy at ~4% – among the lowest in Asia-Pacific – implying strong occupancy and revenue stability for operators. In effect, “scale-up and close-to-zero vacancy” gives incumbents leverage when negotiating leases with new customers. Indeed, Sify Infinit’s IPO prospectus notes it is investing ₹1,300+ crore in new build (Mumbai, Chennai) in part because demand remains very strong.

Government Support and Regulatory Reforms for Indian data center

Beyond tax breaks, India’s government has taken other supportive steps. In 2025, the Supreme Court streamlined environmental clearances for large industrial projects (including data centers) by allowing State-level boards to clear them if built on >20,000 m², greatly accelerating approvals. The budget and related announcements also emphasize energy (e.g. waiving customs duties on nuclear power equipment) and digital security (the proposed Personal Data Protection Bill) as important enablers for data center growth. Together, these reforms aim to reduce time and cost to build new campuses.

Indian data center IPO Pipeline and Key Players

The combination of surging demand, favorable policy, and limited VC funding has pushed several pure-play data center companies to prepare for public listings. Key candidates include:

• Sify Infinit Spaces Ltd: A wholly-owned subsidiary of Sify Technologies, this colocation/data center arm filed its DRHP in Oct 2025. SEBI approved its ₹3,700 crore IPO (Rs 2,500 cr fresh equity + Rs 1,200 cr offer-for-sale) in early 2026. It will use roughly ₹1,325 cr of proceeds for capacity expansion (Mumbai, Chennai) and ₹600 cr to deleverage. In FY2024-25 SISL reported revenue of ₹1,428 crore and net profit of ₹126 crore, up ~28% year-on-year. The IPO will create India’s first listed pure data-center company.
• Yotta Data Services / Nidar Infrastructure: Yotta (Hiranandani Group) was pursuing a Nasdaq SPAC at a $2.75 billion valuation. In Jan 2026, its CEO announced a pivot to seek an India IPO first, potentially in FY2026–27. Yotta operates multiple hyperscale campuses (Panvel, Noida, GIFT City) with plans for others in Pune, Chennai, Dhaka and a 2 GW “AI City” in Hyderabad. Financially, Yotta is growing rapidly (revenue roughly 2½x from $22 M in FY23 to $49.2 M in FY24) but is still unprofitable (FY24 net loss ~$52.8 M) as it invests heavily. Its FY25 forecast is ~$156 M revenue (with higher losses). A successful IPO would hinge on valuing future scale and AI-readiness, as investors debate whether to treat Yotta as a data-center infra play or an AI-tech company.
• Nxtra Data (Bharti Airtel): Airtel sold ~24% of Nxtra to Carlyle in 2020 at a $1.2 billion valuation. Now, reports indicate Nxtra is exploring an IPO in the next couple of years, with its enterprise value estimated around $3 billion. Airtel has committed ~₹4,500–6,000 cr for Nxtra to double its capacity (roughly 80–100 MW now) in the next 3–4 years. Even if still majority-owned by Airtel, a Nxtra float would let investors tap India’s telecom-driven cloud build-out.
• CtrlS Datacenters: A privately-held firm (rated [ICRA]AA), CtrlS is one of India’s largest colocation operators. It had ~130 MW of capacity by mid-2025 (up from 87 MW in March 2024) and revenues of ₹1,567 cr in FY2025. Operating margins are high (~50%) due to long-term contracts. CtrlS plans ~₹4,500–4,600 cr of capex over FY2026–28 (mostly debt-funded) to add new data centers. Its promoters have signaled an IPO once scale-up is sufficient. A successful CtrlS listing would likely command a premium, given its niche (fault-tolerant Tier-IV design) and strong Indian clientele across hyperscalers, BFSI, etc.
• Others: Beyond these, Airtel also counts on its broader network to drive Nxtra; Reliance is building a massive (AI-focused) campus via its Adani JV; Jio Platforms could eventually spin off cloud assets; and global giants (Digital Realty, Equinix, etc.) are partnering on Indian projects (e.g. Digital Connexion). But the pure-play IPO pipeline centers on Sify, Yotta, Nxtra, and CtrlS for 2026–27.

Financial Profiles and Indian data center IPO Readiness

These companies share a capital-intensive, annuity-like business model. Occupancy is long-term (5–10 year contracts), so cash flows are steady. Profit margins can be strong once breakeven (CTRLs ~50% OPM). But returns are slow to materialize due to huge upfront capex (often 5–6 MW per $30–40 M, rising to ~$40 M/MW for GPU/AI-focused sites).

• Sify Infinit Spaces (SISL): As noted, FY2025 revenue ~₹1,428 cr, profit ₹126 cr. Its balance sheet shows significant debt; Sify parent had ~₹3,995 cr net debt at end-2025. But SISL’s IPO will raise equity (2,500 cr fresh) to fund growth and reduce leverage. Analysts estimate post-IPO valuations might be ~10-12× run-rate EBITDA, given sector multiples.
• Yotta (Nidar Infrastructure): Revenues roughly doubled to $49.2 M in FY24. It expects ~$156 M in FY25, indicating very high growth (powered by new customer acquisitions and service expansions). But it also projects a deepening net loss (due to CAPEX) of $113 M in FY25. Yotta’s sheer growth trajectory, backed by Hiranandani’s land and construction expertise, is its strength. Even so, IPO investors will scrutinize its path to profitability, and may initially value it more as a high-growth AI-enabler (with 30-40× sales multiples) rather than a cash-flowing REIT-like asset.
• Nxtra (Bharti Airtel/Carlyle): Airtel has not broken out Nxtra’s standalone financials publicly. However, Carlyle valued the business at $1.2 billion in 2020, and now estimates are ~$3 billion. Nxtra’s growth is partly driven by Airtel’s enterprise network bookings. At listing, Nxtra could be structured as an independent entity with major shareholding by Airtel and Carlyle. Its core metrics (utilization, revenue per MW) will be valued similarly to peers.
• CtrlS: According to ICRA, CtrlS’s FY2025 revenue ~₹1,567 cr with ~50% EBITDA margin. They expect 20-25% annual revenue growth in FY26-27 as new capacities come online. Debt/EBITDA may rise to ~3.5–4× post-expansion, still manageable. If it IPOs, CtrlS might aim for 8-12× FY2025 EBITDA, reflecting its premium Tier-IV position.

Risks in Indian data center

While prospects are bright, investors should consider key risks:

• Overcapacity: Many players are building large capacity simultaneously. JLL’s “85% growth by 2027” projection implies a sharp spike in supply. If demand (or leasing velocity) lags, vacancies could rise and pressure prices. A PitchBook report warns that global DC returns could soften if aggressive build-outs overshoot actual need.
• Capital Cost and Leverage: Data centers require sustained, high spending. All players are debt-financing major portions (e.g. CtrlS ~₹3,000–3,500 cr debt vs ₹4,500–4,600 cr capex). Rising interest rates or a funding squeeze (e.g. if markets sour on tech/infra in 2026) could squeeze profitability. VCs have largely shied from this sector for that reason.
• Regulatory/Operational: Land, power, and clearances remain a challenge. Although the SC eased some rules, data centers still face state-level approvals, and setbacks (like power outages) can be critical. Also, policy changes (e.g. data localization rules) could both boost and complicate demand dynamics.
• Valuation Hype: The “AI/data center” narrative is hot, and Indian markets may bid up IPOs on growth stories. As one analyst said, the question is whether investors will value businesses for stable cash flows (like REITs) or as high-growth tech plays. Early investors in listed AI or cloud names (in US/Asia) have seen wild swings (e.g. CoreWeave’s leveraged IPO performance). Indian data center IPOs could face similar volatility.

Final Words on Indian data center IPOs

Overall, India’s data center industry is entering a structural inflection point. Strong domestic demand and historic under-capacity (India is still a “third-tier” market globally mean growth prospects remain robust. Budget incentives and JVs with global hyperscalers further de-risk the sector’s expansion trajectory.

For the 2026–27 IPO season: Sify Infinit is likely to hit the market first, giving investors a proxy on domestic colocation demand. Yotta and Nxtra could follow, offering access to hyperscale-led, AI-optimized infrastructure growth. CtrlS would bring a more traditional colocation play. IPO investors should compare valuations to global peers (data center REITs trade ~10–20× EBITDA, Nvidia-adjacent AI infra trading higher) and be mindful of execution risk. Given the capital intensiveness, these listings may best suit investors seeking an infrastructure-yield with secular growth, rather than high-ROE tech bets.

In summary, Indian data center sector is poised for multi-year growth. Government policy (2047 tax holiday, fast-track APAs, infrastructure status) and corporate commitments (both local and international) create a strong tailwind[2]. The coming IPOs will channel that growth into public markets. Well-capitalized and operationally seasoned players (with near-full utilization or signed contracts) stand to benefit most, while investors should watch for signs of oversupply or valuation froth. If managed prudently, this wave of funding could give India one of the world’s largest and most modern data center ecosystems by 2030.