Over $6.5-Billion Investment Committed In India's Data Centre Sector In A Decade: Report

India's data centre sector has over $6.5 billion in investments committed through private equity, joint ventures and acquisitions between 2014 and 2024, a new report by Anarock Capital shows.

The industry has witnessed exponential growth between 2019 and 2024, recording a 139% increase in capacity — scaling from 590 MW in 2019 to 1.4 GW in 2024.

Mumbai and Chennai dominate the data centre market, accounting for 70% of India's total IT power capacity, with Mumbai alone contributing nearly half at 49%. These cities also witnessed phenomenal supply growth from 2022 to 2024 — 92% in Mumbai and 340% in Chennai.

Other key markets include: Noida: 9%; Bengaluru: 8%; Hyderabad: 4%; Pune: 5%.

India has emerged as a hotspot for hyperscalers adopting the 'own-and-operate' model. Over the past five years, around 440 acres of land have been acquired for the creation of hyperscalers across three major cities: Hyderabad: 69%; Mumbai: 22%; Pune: 9%.

The size of the data centre sector is estimated at $10 billion, with $1.2 billion in revenue for FY24, according to Shobhit Agarwal, chief executive officer of Anarock Capital.

"Capital deployment has surged between 2022 and 2024, with $4.2 billion deployed on-ground till FY 2024," Agarwal added. "The total capital deployed, including fixed assets and working capital, amounted to $2.6 billion in equity and $2.4 billion in debt as of March 2024. This signals aggressive expansion sentiment and investor confidence."

Artificial Intelligence is set to drive the next wave of DC requirements. To accommodate AI workloads, future-ready DCs will require: liquid cooling technologies, rack densities of more than 30–40 kW per rack, and floor loads up to 2,500 kg/sq.m.

To bring computing closer to users, edge data centres, which are small-scale, decentralised data storage and processing facilities located closer to end-users and devices in tier 2 and tier 3 markets, are emerging.

These include cities like Jaipur, Ahmedabad, Kochi, Vizag, Lucknow, Patna, and Bhubaneswar. Essential for real-time apps and generative AI services, these facilities handle data locally, thereby lowering latency.

With environmental concerns gaining traction, there is a growing emphasis on energy-efficient design, renewable energy sourcing and sustainable cooling methods. Green data centres are set to be a cornerstone of industry development. 

With exponential growth in data consumption, aggressive capital infusion, hyperscaler activity and a strong push towards AI and sustainability, India is set to take a pole position in terms of global data infrastructure, the report added.