Hiranandani Group's Yotta Infrastructure to invest Rs 19,000 crore in data centres

A single data-centre with about 5,000 racks needs a Rs 1,000 crore investment: CEO


As the demand for cloud-based services is on the rise, so is the need for large scale data centres. Against this backdrop, the Hiranandani Group-owned data centre (DC) company Yotta Infrastructure is scaling up its DC business and will now open new DCs in Delhi and Kolkata as well, apart from the Mumbai DC, which went live a couple of months of ago, and the Chennai DC, where the construction is set to start soon.

DCs are capital intensive projects and Yotta envisages an investment of close to Rs 19,000 crore to set up DCs across these four cities.

“Broadly, for each building, which I am making, roughly of 5,000 racks, typically I need to put Rs 1,000 crore. Between Mumbai, Chennai and Delhi, I am making 15 buildings, so broadly, it will be 15,000 crore. In Kolkata also if I make four buildings, it will be another Rs 4,000 crore, so totally around Rs 19,000 crore,” Sunil Gupta, MD and CEO of Yotta Infrastructure, told THE WEEK.

While the Chennai DC is expected to be delivered by December 2021, the Delhi one would be completed by April 2022.

“We added Delhi to our bouquet, as we found the response in the market to be bigger, there are large customers who are planning their deployments in the north. So, we have gone ahead and acquired a 20-acre land parcel in Noida and the approval process to start the construction is in process,” said Gupta.

In Kolkata, the company still needs to acquire the land.

Over the last few years, data consumption in India has exploded. Aided by cheap data and penetration of smartphones, many more people started shopping on e-commerce websites and viewing content on OTT platforms. Following the nationwide lockdown that was initiated to curb the spread of the COVID-19 pandemic, the usage has only jumped further. Additionally, now people are working from home and children are attending schools and colleges online, which has led to a surge in demand for video conferencing applications. This has led to a huge demand for cloud-based services and in turn for DCs.

“So far, everybody started their India entry mostly from Mumbai, they made DCs in Mumbai and everybody was hosting content in Mumbai. Gradually, they will start having more cluster of cloud zones in other cities also. So, the data explosion and the need for all these content operators to be closer to the user, that is the main driver (of growth in demand for DCs),” said Gupta.

A lot of enterprises were planning shift away from their captive DCs to large third party DCs, which would also be another growth driver, he added.

Earlier this month, Bharti Airtel had inked a strategic collaboration agreement with Amazon Web Services to deliver a comprehensive set of cloud solutions to large as well as small and medium enterprises.

Real estate consulting firm JLL estimates that India’s DC industry capacity will grow at a 21 per cent compounded annual rate to 1,078 mega watts (IT power load) by 2025 from 375 megawatt in the first half of 2020. This huge growth would create a need for real estate space of 9.3 million square feet and open up a $4.9 billion greenfield investment opportunity for developers and investors by 2025, it said.

Netmagic Solutions, owned by Japan’s tech giant NTT has also been expanding its data centre footprint in India, with plans to open its third DC in its existing campus in Chandivali, Mumbai. In January this year, NTT had announced the launch of its new global data centres division, which would incorporate the various DC companies of NTT. It consists of four regions Americas, Asia Pacific, Europe, Middle East and Africa and India. 

Earlier this month, US-based data centre company Equinix had entered India with the acquisition of the local operations of GPX Global Systems Inc.

"India represents the second-largest internet user base in the world, with consumption expected to grow with the continued advancement of internet infrastructure, smartphone ownership and the penetration of 4G and 5G. Extending platform Equinix to India has long been a strategic objective for Equinix and we are excited that the GPX transaction will allow us to capitalise on this market opportunity and meet the needs of our customers as they seek to expand their digital businesses,” Charles Meyers, president and CEO of Equinix had said in a statement.


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