Beyond The Headlines: Where India’s Data Centre Money Is Actually Flowing

In recent months, I’ve written extensively about India’s data centre boom. The headlines are now familiar. Hyperscalers are committing billions. Telcos are repositioning themselves as digital infrastructure platforms. State governments are competing to brand themselves as cloud and AI hubs.

All of that is real. But it’s incomplete. Beyond the announcements, the more important question for investors is not who is building data centres, but where the money actually flows once a data centre is approved.

Because a data centre is not a single asset, it is a layered industrial system. And most of the capital does not sit with the operator. It flows outward into power, cooling, construction, electrical equipment, security, and land.

What follows is a map of where data centre capital actually lands once the press release fades, and which listed sectors sit closest to that flow. That context matters because India’s largest data centre commitments today are being driven by platform players rather than pure-play operators.

Announcements from Reliance Industries’ Jio, Adani Enterprises, and Bharti Airtel are not isolated bets. They represent sustained, multi-campus demand that pulls capital into power, cooling, construction, and land at an industrial scale.

Beyond the large conglomerates, operators such as Sify, Nxtra, Yotta, NxtGen, and NTT are reinforcing this pattern by clustering capacity around power-secure corridors rather than chasing the lowest-cost land.

At Greyhound Research, when we double-click into data centre economics, a clear pattern emerges. The investable opportunity for public market investors sits not at the top of the stack, but in the infrastructure beneath it. Understanding that the stack is what separates headline chasing from durable exposure.

Strip away the branding, and a data centre looks less like a technology asset and more like an industrial balance sheet. The capex split below shows where capital is committed before the first server even switches on.

Once you look at the market through this lens, the hierarchy of beneficiaries becomes clearer. The company examples that follow illustrate where spending concentrates, not prescriptions for individual stocks.

Power sits as the most dominant and least flexible layer of the data centre cost stack. It is the one component that cannot be deferred, optimised away, or substituted without consequence. As AI workloads intensify and tolerance for downtime collapses, redundancy layers multiply and upgrade cycles compress.

That reality quietly favours listed utilities and electrical equipment suppliers that operate upstream of utilisation cycles. This is already visible in how India’s largest platforms are building. Jio’s data centre strategy is tightly coupled with captive power and grid adjacency.

Adani’s approach integrates energy generation, transmission, and data centre development into a single control loop. Airtel, operating across multiple metros, is prioritising sites where power availability and redundancy can scale ahead of compute demand.

The common thread is not branding. It is power certainty. Utilities such as NTPC, Tata Power, and JSW Energy benefit from long-duration, always-on demand anchored by hyperscale campuses. Backup power and electrification firms like Cummins India and Kirloskar Oil Engines are paid for reliability rather than price sensitivity.

Electrical equipment suppliers such as ABB India, Hitachi Energy India, Siemens India, and CG Power sit behind every new campus because no data centre exists until the substation is energised. Cooling follows as the next structural pressure point.

In AI-heavy environments, thermal management no longer scales neatly with compute. It becomes a performance bottleneck that dictates density, reliability, and operating margins. What was once treated as a facilities concern now behaves like core infrastructure.

That shift is pulling industrial HVAC and thermal management firms into the centre of the data centre story. Listed companies such as Voltas, Blue Star, and Thermax are increasingly exposed to precision cooling, energy-efficient chillers, and AI-ready thermal systems.

Component-level suppliers like KRN Heat Exchanger show how data centre money also flows two layers down the supply chain, often creating unexpected capacity constraints and pricing power.

Construction and EPC absorb a meaningful share of spend, but this is not a volume-driven business. It is execution-limited and reputation-sensitive. Data centres are unforgiving assets, and failure is not tolerated. Capability compounds quickly, but so does exclusion.

This is why firms such as Larsen & Toubro have carved out dedicated data centre execution capability, both as contractors and as owners of their own capacity. Specialist EPC players like Sterling & Wilson Renewable Energy have seen order inflows accelerate because once credibility is established, repeat work follows.

For investors, this segment offers fewer names, but higher ticket sizes and stronger order visibility. IT hardware itself remains a large but largely upstream layer for Indian markets. Servers, storage, and networking equipment flow primarily to global OEMs and hyperscalers’ internal supply chains.

From an investor perspective, this layer matters less as a direct opportunity and more as a demand amplifier. Every incremental rupee spent on compute increases downstream demand for power, cooling, electrical infrastructure, and more.

Security and building management systems may occupy a smaller slice of the stack, but they are non-negotiable. Physical security, access control, surveillance, fire detection, and monitoring scale with footprint and regulation rather than utilisation.

As facilities expand and compliance expectations tighten, security behaves more like an annuity than a project cost. Listed exposure is thinner, but firms such as SIS and automation-led players like Honeywell Automation India sit inside that steady spend.

Land and external infrastructure complete the picture. While not always the largest line item, land increasingly acts as a gating constraint. Data centres require power-ready, permitted sites with connectivity and water access.

Developers such as Anant Raj, DLF, Macrotech Developers, and REITs like Mindspace Business Parks REIT are repositioning themselves as digital landlords rather than passive property owners, backed by long leases and infrastructure-linked cash flows.

There is, however, a constraint investors should not underestimate. These money flows assume execution keeps pace. Power availability, permitting timelines, water access, and skilled delivery capacity are already tightening in several markets.

Data centre demand can scale faster than grids, approvals, and experienced EPC talent. When that happens, capital does not disappear, but it concentrates. Projects move to fewer locations. Orders gravitate toward proven suppliers.

Smaller or late entrants get crowded out. For investors, this means the opportunity is not evenly distributed across the stack. It increasingly rewards scale, credibility, and the ability to deliver under constraint.

What investors often miss is that none of these spends are one-time. Redundancy expansion, density upgrades, regulatory change, and AI workload evolution force repeated reinvestment. That is why this cycle behaves less like a tech refresh and more like a sustained infrastructure build.

The larger conclusion is straightforward. India’s data centre boom is not a technology rally. It is an infrastructure cycle. Infrastructure rewards scale, patience, and execution discipline. It punishes leverage, shortcuts, and optimistic assumptions about power availability.

The most durable exposure tends to sit with companies that get paid whether a data centre runs at 60% or 95% utilisation. If you want to follow the money, look beneath the server racks. That’s where this cycle is really playing out.

Disclaimer: The views expressed in this article are solely those of the author and do not necessarily reflect the opinion of NDTV Profit or its affiliates. Readers are advised to conduct their own research or consult a qualified professional before making any investment or business decisions. NDTV Profit does not guarantee the accuracy, completeness, or reliability of the information presented in this article.