Bharti Airtel bags $235 mn investment in arm from Carlyle group, sells 25% stake in data centre biz

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Published: July 1, 2020 9:21 AM

Sunil Mittal-led Bharti Airtel on Wednesday announced that US-based Carlyle Group will invest $235 million in its data centre business Nxtra Data Limited (Nxtra) for a 25% stake.

During the same time, the subscriber base of Bharti Airtel was 345.88 million while that of Reliance Jio was 239.23 millionDemand for secure data centres in India is surging post the government of India’s decision that data of Indian users must be stored in India.

Sunil Mittal-led Bharti Airtel on Wednesday announced that US-based Carlyle Group will invest $235 million in its data centre business Nxtra Data Limited (Nxtra) for a 25% stake. The investment will be made by Comfort Investments II, an affiliated entity of CAP V Mauritius Limited, an investment fund managed and advised by affiliated entities of The Carlyle Group. In a joint statement, Bharti Airtel and The Carlyle Group said that the post-money enterprise valuation of Nxtra is approximately $1.2 billion. Bharti Airtel is India’s second-largest telecommunications network operator in terms of subscribers.

The Delhi-based Nxtra from Airtel offers secure data centre services to leading Indian and global enterprises, start-ups, SMEs, and governments, the company said in the statement. Post the investment, which is still subject to regulatory approval, Bharti Airtel will continue to hold a 75% stake in the company. Nxtra has 10 large data centres and over 120 edge data centres. 

Demand for secure data centres in India is surging post the government of India’s decision that data of Indian users must be stored in India. “The expansion of hyperscalers across the region following the government’s directive on data localization is propelling a lot of this demand, with other market drivers including the growth in user data and increase in cloud penetration,” Bharti Airtel said. Nxtra, which is already scaling up its infrastructure with data centres in Pune, Chennai, Mumbai, and Kolkata, said it will use the proceeds from the transaction to further improve its infrastructure and services.

“Rapid digitization has opened up a massive growth opportunity for data centres in India and we plan to accelerate our investments to become a major player in this segment,” said Gopal Vittal, MD & CEO (India and South Asia), Bharti Airtel. Gopal Vittal added that the partnership with Carlyle Group is particularly exciting given the group’s experience in the industry. Carlyle with an investment in Bharti Airtel can now tap into India’s fast-growing telecom sector. “ Airtel, with its proven track record of solid execution and customer focus, is well-positioned to leverage the potential growth of data centres in India. We look forward to collaborating with Airtel to unlock the full potential of Nxtra,” said Neeraj Bharadwaj,  Managing Director of the Carlyle Asia Partners advisory team.

This is the first investment Bharti Airtel has received since Mukesh Ambani led Reliance Jio acquired Rs 1.15 lakh crore from multiple global investors in 9 weeks. Jio’s largest investment came from Mark Zuckerburg’s Facebook for a 9.99% equity stake. 

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