Data center capacity in India is expected to increase in three years: Report

According to research released on Wednesday, India’s data center capacity is expected to double in three years, from around 0.9 gigawatts (GW) in 2023 to 2 GW in 2026.

According to the CareEdge Ratings research, the expected capex need of Rs 50,000 crore in the next three years has provided huge investment chances owing to the extra capacity built-up.

Even though India generates 20% of the world’s data, the country currently has just 3% of the world’s data center capacity, and its mobile data use is the highest in the world when measured in exabytes per month.

According to Puja Jalan, Associate Director at CareEdge Ratings, “the project execution challenges, in terms of land and equipment availability and management of the vendor ecosystem, need to be addressed for the fructification of the planned capacity.”

In addition, Jalan said that the average cost per MW for establishing a data center has increased, going from Rs 40–Rs 45 crore to levels of Rs 60–70 crore per MW.

The country’s absorption rate has grown in tandem with the capacity expansion.

According to the research, there was an increase in absorption from 82% in 2019 to 93% in 2023.

Revenue growth is expected to continue over the following three to four years, with a 32% CAGR rise over FY24–26.

According to the analysis, it is expected that the EBITDA margins will likely be steady over the next three years.

Announcements of 5 GW of additional capacity are anticipated to come to market over the course of 5–6 years.

According to Maulesh Desai, Director of CareEdge Ratings, “moving forward, cost competencies, innovative designs to accommodate scalability and adoption of newer technologies to meet ever-rising energy and cooling requirements are critical success factors for the industry.”