For much of its history, Anant Raj Ltd. was just another real estate developer in the crowded Delhi NCR market.
It built residential towers, plotted colonies, commercial buildings and hotels. Nothing unusual about that. Investors knew what to expect. The company owned land, developed it and sold it. Sometimes the cycle was good, sometimes it was bad and the stock moved accordingly.
But over the past few years, something interesting has been happening.
Anant Raj has started talking less like a traditional property developer and more like a company of the digital age.
It wants to be seen not only as a real estate play but also as a data center operator.
And that is a very different story.
The backdrop
India’s appetite for data is exploding.
A billion smartphones, cheap data plans, the spread of OTT video, cloud adoption by businesses and new rules on data localisation have created unprecedented demand for storage and processing.
The country crossed the 1 gigawatt mark in data center capacity in 2024, up three times from 2019. By 2027, this is expected to climb to ~1.8 gigawatts, requiring billions of rupees in new investment.
The three biggest hubs are Mumbai, Chennai and Delhi NCR.
Each has its own advantages.
Mumbai has connectivity to undersea cables, Chennai is emerging as a coastal hub and NCR has proximity to government and corporate clients. This is where Anant Raj’s long history of owning large tracts of land in NCR suddenly becomes relevant.
Land as the foundation
The company owns around 320 acres of debt-free land in NCR. For decades, this land was the raw material for housing and commercial projects. Now it is also the key input for building data centers.
Land in NCR is scarce and approvals are not easy to get. That gives Anant Raj an edge over newer entrants.
In 2021, it forayed into the business with a modest 6 MW facility (including half a MW for cloud services).
That was a pilot.
Since then, its ambition has grown.
By mid-2025, two new facilities at Manesar and Panchkula were commissioned, adding roughly 22 MW of capacity. That puts total operational capacity at ~28 MW.
The design is deliberate.
The two sites can act as a data center and a disaster recovery site for each other.
Clients want redundancy. Anant Raj wants recurring income. Already, a large private sector client has signed up for 3 MW across colocation and cloud.
The big plan
The company’s roadmap is ambitious.
Anant Raj has projected that revenue from its data centre and cloud services business will grow to about Rs 12 billion by FY27 and further expand to nearly Rs 90 billion by FY32, underscoring the segment’s high-growth potential.
It plans to scale capacity to 63 megawatts (MW) by FY27, 107 MW by FY28, and eventually 307 MW by 2031.
Around a quarter of this capacity will be reserved for cloud services in partnership with Orange Business, the enterprise arm of French telecom major Orange S.A.
Anant Raj tied up with Orange in 2023, when it launched its cloud services alongside the expansion of its data center capacity.
That tie-up is significant: Orange brings technical expertise to run scalable and secure cloud platforms, while Anant Raj brings land, infrastructure and local execution. Together, they aim to go beyond just renting racks and power, into higher margin services like Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS).
Early signs in the numbers
The financials are beginning to mirror the strategic shift.
FY25 revenue stood at Rs 20.6 billion, up 38.9% over the previous year. The EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) margin for the year was ~23.9%, up from 22.9%.
Q1 FY26 revenue rose 26% year-on-year to Rs 5.92 billion. The EBITDA margin improved to ~25% from ~22% in Q1 FY25.
Management has attributed part of this improvement to the expanding data center business, where operating margins can exceed 70% and noted that the ramp-up of the Panchkula and Manesar facilities will progressively strengthen profitability in the coming quarters.
The balance between real estate and digital infrastructure is becoming clearer.
Residential and property projects generate lump-sum cash inflows. The data center business, once scaled, promises recurring income with higher margins. Together they form a dual engine that the company did not have merely a few years ago.
Funding the gamble
Data centers are capital-intensive. Building them demands steady power, cooling, connectivity and redundancy.
The next two years alone may require ~Rs 19–20 billion in capital outlay.
So, where will the money come from?
The company is relying on its real estate cash flows. Its flagship township in Sector 63A, Gurugram, comprises villas, group housing and apartments. Projects like The Estate Residences and Avarna independent floors have been doing well. The plan is to recycle net cash flows from real estate into data center capex.
This sets Anant Raj apart.
Many peers raise external capital or debt for expansion. Anant Raj intends to fund much of the growth internally.
With net debt at only ~Rs 1.2 billion in FY25, a debt-to-equity of 0.12 and interest coverage of 55.9, Anant Raj has ample headroom to lever up if needed, though for now it signals a conservative capital structure.
Risks and realities
Yet, the path ahead is not without hazards.
Expansion timelines have already faced delays due to pollution control approvals in NCR.
Power availability is another critical constraint.
A target of 307 MW by 2031 is ambitious. Power deficits, regulatory hurdles and intensifying competition could all pose challenges.
Competition is stiff.
Global players like NTT, Equinix and Digital Realty are present. Domestic players such as AdaniConneX and Reliance Jio are pumping in capital. They bring brand strength, global credibility and strategic clients.
Anant Raj’s land bank is an advantage, but building trust in cloud services will take time.
There is also the question of focus.
Real estate remains the cash engine. As Anant Raj pushes deeper into data centers, it must manage two very different businesses. Real estate is cyclical. Digital infrastructure is secular. Balancing both won’t be easy.
Valuation picture
Anant Raj trades at ~50.5 times trailing earnings and above 5.6 times book value, far richer than most real estate peers.
The premium reflects investor belief that data centers, with their potential for high margins and recurring income, will markedly change the earnings profile.
The company’s RoE (Return on Equity) was 10.9% in FY25. If the digital business scales and margins expand, that number could rise.
But much of the optimism seems to be already priced in.
Investors today are paying for a future transformation, not just present real estate cash flows. The real test will be whether Anant Raj can scale capacity and sustain utilisation that justifies these valuations.
A hybrid story
Despite the risks, Anant Raj is carving out an unusual identity. It is using the cash churn of its old-economy business to enter the new economy. The result is a hybrid company with one part real estate and one part digital infrastructure.
Anant Raj is no longer just a builder of homes and offices. It wants to be a builder of digital India. Time will tell whether the transformation lives up to the valuation.
Disclaimer:
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
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Manvi Aggarwal has been tracking the stock markets for nearly two decades. She spent about eight years as a financial analyst at a value-style fund, managing money for international investors. That’s where she honed her expertise in deep-dive research, looking beyond the obvious to spot value where others didn’t. Now, she brings that same sharp eye to uncovering overlooked and misunderstood investment opportunities in Indian equities. As a columnist for LiveMint and Equitymaster, she breaks down complex financial trends into actionable insights for investors.
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