Engineering and construction giant Larsen & Toubro (L&T) plans to expand its data centre capacity sixfold to 200 MW from 32 MW as it bets big on India’s growing digital infrastructure demand.
The company has developed data centres in Panvel near Mumbai and Chennai, and there is a plan for another 30 MW in Mahape near Mumbai, and it plans to take it to nearly 200 MW, said R Shankar Raman, whole-time director and chief financial officer.
According to industry experts, one MW of capacity requires spending of Rs 50 crore to Rs 70 crore, depending on the site; hence, 200 MW requires a minimum of Rs 10,000 crore investment.
“We are today the largest builder of data centres in India, just as an EPC (engineering, procurement and construction) contractor. So, we are looking at this opportunity with a lot of interest because it will help us kick-start the EPC business on the data centre much more than what we are currently doing,” Raman said.
He further added that data centres are a capital-intensive business, and getting clients to use the data centre for storing servers and keeping data in is not very remunerative. He said just building data centres and leasing them out will give a real estate kind of return, and hence they are looking to give value additions by providing cloud services along with the centres.
“So, data centre I think is a matter of interest and as quarters roll by, we will figure out as to how well we are moving in that space,” he said.
Indian data centre capacity will double by 2027 based on under-construction capacity, and may increase five times by 2030 if pipeline capacity is fast-tracked, according to a Macquarie Equity Research report. The report stated that India currently has 1.4 GW of operational data centre (DC) capacity, with 1.4 GW under construction and another about 5 GW in the planning stage.
With regard to shipbuilding opportunities, Raman said the big programmes are yet to be announced for the private sector.
“We read with a lot of interest the government announcements on some of these programmes and we do hope that by the end of the year, maybe one or two of these programmes will be announced and we would emerge as a successful bidder in those programmes,” he said. L&T builds ships for defence, such as Navy, Coast Guard vessels, survey vessels, etc.
On electronics manufacturing, he said it is a part of their strategy to broaden the revenue streams, and they are looking at electronics manufacturing in specific areas, he added.