As Crisil Ratings report indicates that data centre operators in India are expected to clock an annual revenue of Rs 20,000 crore by FY28, the focus of the investor is on mega Indian conglomerates such as Tata, Reliance Industries and Adani Group, who have planned massive billion-dollar investments to develop hyperscaler data centres.
Crisil Ratings says that the industry is expected to see an annual revenue growth rate of 20-22 per cent.
Crisil on growth potential of data centres in India
The report says that the data centre capacity is expected to double to about 2.3 GW-2.5 GW by March 2028. Along with the capacity addition and revenue growth, the capital expenditure in the sector is expected to rise to Rs 55,000-65,000 crore from FY26 to FY28.
“The incremental capacity of 1.1-1.3 GW estimated to be commissioned during fiscals 2026-2028 is expected to achieve timely tie-up backed by strong demand and India’s data centre density2 of just ~65 MW per exabyte, one of the lowest globally. This will translate into comfortable utilisation of 90-95%, in line with the past three fiscals,” said Anand Kulkarni, Director, Crisil Ratings.
Key growth drivers for data centres
The Crisil Ratings report highlights three main drivers of the data centre industry’s growth. First, the increasing adoption of public cloud by enterprises amid ongoing digital transformation and technological advancements is aiding the data centre boom.
Secondly, the growing investments in the artificial intelligence segment are going to increase the demand for a large number of data centres and high-density computing infrastructure.
Third, Crisil Ratings notes, the proliferation of 5G technology in India is also expected to increase the demand for data centres to meet local storage needs. The report added that 5G proliferation is expected to increase demand for data centres to accommodate services such as video streaming, gaming and other related products.
Hyperscaler centres to benefit most
The Crisil Rating report stated that hyperscale data centres, which have IT power capacity tie-ups exceeding 5MW, now account for more than half of the total capacity tie-ups, providing stable and predictable cash flow visibility to data centre operators.
The report added that hyperscalers have strong bargaining power due to their scale. Going forward, Crisil said, the average pricing for the new contracts, which has remained largely stable over the past two fiscal years, is expected to remain monitorable.
Major data centre investment announcements
As the data centre sector expands in India, major conglomerates have forayed into the sector with commitments of billions of Rupees. Earlier last week, Tech major TCS announced an investment of Rs 18,000 crore in the sector, in a partnership with private equity firm TPG.
Similarly, Adani Group has also partnered with Google to develop data centres in Andhra Pradesh with an investment of $15 billion and Reliance Industries has also joined hands with Meta and Google to develop 1GW data centres
