The Indian data centre industry capacity is expected to more than double to 2-2.3 GW by fiscal 2027, stated a report by CRISIL Ratings. The growth, it added, will be led by increasing digitalisation of the economy as enterprises increase their investments in cloud storage and consumer demand for data surges. Also, rising penetration of Generative Artificial Intelligence (GenAI) will drive the demand over the medium term.
Further, CRISIL Ratings said that incremental capital expenditure (capex) to support the strong demand would see a higher proportion of debt funding, resulting in a moderate increase in debt levels. That said, per the report, capacity additions will lag demand growth, keeping offtake risks low. As a result, the industry can expect healthy and stable cash flows, which will keep the credit profile of players steady.
CRISIL Ratings analysed industry players, representing around 85 per cent of the market share by operational capacity, to release the findings of the report.
Also Read Indian Airports to witness Rs 60,000 crore capital expenditure surge by FY27, driven by growing passenger demand: Report The cloud shift: How businesses are transforming IT infrastructure to stay competitive in the digital age India’s E&M industry set to hit Rs 3.65 lakh crore by 2028 with digital growth leading the way; Reveals PwC APAC computed tomography market to see consistent growth through 2033
Also ReadCement industry to witness recovery in H2FY25 amid competitive pricing dynamics; Know more on pricing movement
Data centres cater to the computing and storage infrastructure demand, which is driven by two primary drivers. One, enterprises are rapidly shifting their businesses to digital platforms, including cloud. Two, increased accessibility of high-speed data has led to a surge in internet usage, including social media, over-the-top (OTT) platforms and digital payments. Notably, mobile data traffic logged a compound annual growth rate (CAGR) of 25 per cent over the last five fiscals. It stood at 24 GB per month at end-fiscal 2024 and is expected to rise to 33-35 GB by fiscal 2026.
In addition to the ongoing demand, CRISIL said, data centre demand in India will continue to grow on rapid advancement of GenAI, which requires higher computational power and low latency than traditional cloud computing functions.
» Read More
