India’s Data Centre Industry Sees $6.5 Billion Investment Surge

India’s data centre industry has experienced a significant boost, with over $6.5 billion in investments through private equity, joint ventures, and acquisitions between 2014 and 2024, according to a new report by ANAROCK Capital.

The report, titled India Data Centre Market: Growth, Trends & Outlook, highlights the rapid growth of the sector, with India’s data centre market now valued at $10 billion and generating an impressive $1.2 billion in revenue for FY2023-2024.

Exponential Growth In Data Centre Capacity

The data centre sector has witnessed remarkable growth from 2019 to 2024, with a 139% increase in capacity.

Data centre power capacity surged from 590 MW in 2019 to an estimated 1.4 GW by 2024.

Despite EBITDA growth showing signs of plateauing after 2020, experts forecast a 50-55% rise in earnings as under-construction projects stabilize.

Capital Investment And Investor Confidence Soar

Capital deployment in the data centre sector has surged in recent years, reaching $4.2 billion from 2022 to 2024.

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As of March 2024, the total capital deployed, which includes fixed assets and working capital, stands at $2.6 billion in equity and $2.4 billion in debt.

Shobhit Agarwal, MD & CEO of ANAROCK Capital, further explained that this sharp increase signals investor confidence and an aggressive expansion trend in India’s data centre market.

Key Drivers Of Growth: Internet Penetration And Data Consumption

Devi Shankar, Executive Director at ANAROCK Capital, attributes the surge in data centre growth to India’s rapidly increasing internet penetration, which has grown from 33.4% in 2019 to 55.2% in 2024.

Along with this rise, data consumption per user has nearly doubled, from 11.5 GB to 21.1 GB per month.

Mobile data traffic has also exploded, with average usage per smartphone growing from 13 GB to 32 GB.

These factors have made India a global leader in mobile data traffic per smartphone, which has directly driven demand for advanced data centre facilities across the country.

Market Distribution: Dominance Of Key Cities

Mumbai and Chennai are the clear frontrunners in India’s data centre market, accounting for 70% of the nation’s total IT power capacity.

Mumbai alone contributes 49% of the total capacity. From 2022 to 2024, these cities saw record-breaking growth, with Mumbai’s data centre supply increasing by 92% and Chennai’s skyrocketing by 340%.

Other major markets include Noida (9%), Bengaluru (8%), Hyderabad (4%), and Pune (5%), with a combined occupancy rate of 76%, demonstrating strong market absorption and operational efficiency.

The Rise Of Hyperscalers And Edge Data Centres

India has also become a hotspot for hyperscalers, large-scale data centres and cloud service providers adopting the ‘own-and-operate’ model.

Over the last five years, hyperscalers have acquired around 440 acres of land in three major cities: Hyderabad (69%), Mumbai (22%), and Pune (9%).

These hyperscalers play a critical role in the country’s digital infrastructure by providing massive computing resources, storage, and networking capabilities.

Simultaneously, edge data centres, small-scale and decentralized data facilities, are emerging in tier II and tier III cities like Jaipur, Ahmedabad, Kochi, Vizag, Lucknow, Patna, and Bhubaneswar.

These edge further centres bring computing capabilities closer to end users, further driving demand for advanced data infrastructure across the country.

As India’s digital engagement continues to soar, the demand for high-quality data centres is expected to grow, making the sector an essential part of the country’s economic and technological future.