India’s data centre capacity surpassed 1 GW this year and this has set the stage for public listings in the sector with at least three companies ready to come to the market with a valuation of over $4 billion.
Sify Technologies’ data centre arm is readying a $500 million IPO according to a Bloomberg report, ESDS Software Solutions, valued at $268.41 million, has already filed its draft red herring prospectus report on March 30, while Bharti Airtel is planning an IPO for its data centre arm Nxtra in the next 2-3 years.
Another significant data centre provider, Yotta Data Services, that gained prominence after its selection for the India AI Mission is set to be listed in the US-based NASDAQ exchange. Sources were unable to confirm its IPO plans for India to businessline. As per its SEC filing, the company’s pro forma enterprise value would be around $4.2 billion with a capacity of 30.4 MW.
Analysts anticipate considerable growth for the industry in coming years driven by the AI boom. According to property consultant JLL, India’s data centre industry is poised for explosive growth, with capacity projected to surge 77 per cent by 2027, reaching a staggering 1.8 GW.
Increased demand
Data centre operators are seeing increased demand for their their services and need funds for their expansion plans. For example, Nxtra is seeing demand for cloud services, AI-driven applications, and 5G deployments, for which the company plans to invest ₹5,000 crore over the next few years to expand its capacity to 400 MW. This expansion will be carried out within existing campuses by leveraging established power infrastructure and available land. As per Tracxn data, the Airtel data centre is valued at $1 billion with a total funding of $242 million.
The Everest Group research firm said that Sify’s valuation is on the higher side relative to peers, both in terms of value per MW and revenue multiple, considering the current-state and its capacity of 188 MW capacity. The huge IPO also leaves the company with little wiggle room for execution delays, cost overruns, or a slowdown in hyperscaler demand. However, if Sify delivers on utilization and revenue ramp-up, the current pricing could look well-judged.
“It reflects a significant premium for Sify’s scale, nationwide footprint, and the perceived quality of its capacity. However, this is less about the company’s trailing performance and more about where it is headed over the next three to five years and is a forward-priced bet,” Mukesh Ranjan, Vice President at Everest Group.
Everest attributed Sify’s valuation to its rapid monetization potential, pipeline conversion and sector momentum. India’s near-full utilization rates in primary markets is likely to help the bulk of Sify’s current under-utilized capacity to generate revenue within the next two years. Further, with national capacity expected to nearly double by 2026 and absorption rates holding above 90 per cent, there is strong confidence that Sify’s future MW additions will find buyers quickly.
However, this confidence did not extend to the valuation growth of other major operators. Everest said the other companies are valued differently depending on their utilization profile, growth trajectory, and market positioning. For example, Nxtra has a larger share of its capacity already filled and earning revenue, so its valuation is more grounded in present earnings rather than future ramp-up.
“Sify’s premium reflects the expectation of faster growth from a lower monetized base. For some peers, especially those with market leadership and near-full occupancy, per-unit valuations could match or exceed Nxtra’s, but few are valued as far ahead of monetization as Sify. This makes Sify’s pricing more growth-weighted than the market norm,” said Tanvi Rai, Senior Analyst at Everest Group.
Capacity perspective
From a capacity perspective, Rajeev Ranjan, Assocaite Research Director at International Data Corporation (IDC), said approximately, 1.2 to 1.4 GW is operational IT capacity for all the data centres in India. Rajan does not expect this capacity to grow beyond 3.5 GW by 2028 unless projects like energy connectivity get kicked off faster.
So, of the existing capacity, he estimates customers to potentially use about 50 to 60 per cent of the same, largely hyperscale cloud providers or enterprises.
“Customers take 10-15 megawatts based on customer base. Currently, 70-75 per cent of these capacities are taken over by hyperscalers. Four years down, 90 per cent of Indian data centres may include hyperscalers,” he said.
On the other hand, Everest said the operational footprint is already largely monetized, with the small amount of vacant space typically found in newly commissioned sites undergoing customer onboarding. In major hubs, capacity seldom remains idle, as hyperscalers and large enterprises often secure space months or even years before a facility becomes operational. As a result, monetizable capacity is not limited to live, powered-on space; it also includes contracted but not-yet-live MW and, in many cases, under-construction halls with anchor tenants already signed.
“This demand pattern, driven by cloud adoption, AI workloads, and national digital infrastructure goals, ensures that high-quality capacity moves quickly into billable status. In practice, forward capacity is almost as commercially valuable as operational capacity, making it a dependable driver of revenue growth in India’s data centre market,” said Rai.
Published on August 17, 2025
