- India's data centre industry is expected to grow at a 30% CAGR through 2030, reaching 7 GW capacity
- Nomura highlights CG Power and GE Vernova T&D India as key beneficiaries of the data centre capex surge
- Estimated $35 billion capex needed for 5.1 GW capacity addition, mainly for electrical and cooling systems
Amid all the buzz around hyperscalers and artificial intelligence, India's data centre industry is poised for explosive growth in the next five years, with Nomura forecasting a staggering 30% CAGR through 2030, potentially lifting total capacity to around 7 gigawatts from the current 1.5-1.6 gigawatts.
In its latest note, Nomura has called this a 'decadal growth opportunity' for India, while identifying two potential companies that may benefit from the growing trend.
The two companies in question are CG Power and GE Vernoba T&D India. They are Nomura's top picks to benefit from the capex surge, with target prices of Rs 1,050 and Rs 5,675, respectively.
Nomura believes that incremental capacity additions of roughly 5.1 gigawatts through 2030 will require capital expenditure of over $35 billion. The bulk of that spending - around 60-75% - will flow to industrial equipment manufacturers supplying electrical systems, cooling infrastructure and rack hardware.
That is where both CG Power and GE Vernova T&D India come into the fray. After all, India's cost advantage is a major draw for hyperscalers. Construction costs run at approximately $6-7 million per megawatt, compared to $10-18 million in developed Asia-Pacific and Western markets, according JLL data cited in the note.
Competitive electricity sourcing through open access and renewable power purchase agreements can bring effective power costs down to 6-7 US cents per kilowatt-hour, further strengthening the economics.
Meanwhile, there are ample demand drivers present in the system. India's data traffic per installed megawatt stands at roughly 18 petabytes. This is considerably higher than China's 4-5, thus showcasing a structural gap between digital consumption and data centre supply. Cloud, SaaS and AI markets in India are expected to grow at a 20-40% CAGR through 2030.
Another layer to this story is geopolitics. Disruptions in Gulf-based hyperscale infrastructure have prompted global players including Microsoft, Google and Amazon Web Services to accelerate deployments in India, which, in turn, has attracted combined investments exceeding $47 billion from the three tech giants.
However, Nomura cautions that execution remains the critical bottleneck, with regulatory approvals, land acquisition, and grid connectivity frequently extending commissioning timelines beyond initial projections.
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