Carlyle to acquire about 25 per cent stake in Airtel's data centre business for about Rs 1,780 crore

Bharti Airtel and Comfort Investments II, an affiliated entity of CAP V Mauritius Limited, an investment fund managed and advised by affiliated entities of The Carlyle Group announced an agreement under which Comfort Investments II will invest US$ 235 million in Nxtra Data Limited, a subsidiary of Airtel.

The valuation of Nxtra has increased to US$ 1.2 billion after this deal. On completion of the transaction, Carlyle will hold a stake of around 25 per cent in the business and Airtel will hold the remaining stake of approximately 75 per cent. Regulatory approval is required by the company for the transaction, including approval from the Competition Commission of India.

Nxtra is headquartered in New Delhi and offers data centre services to Indian and global enterprises, hyperscalers, start-ups, SMEs, and governments. It has nation-wide portfolio of 10 data centres and more than 120 edge data centres provides customers with co-location services, cloud infrastructure, managed hosting, data backup, disaster recovery, and remote infrastructure management.

An increase in demand for secure data centres is seen in India, as businesses undertake digital transformation and consumer demand for digital services continues to increase. The expansion of hyperscalers across the region following the Government’s directive on data localization is driving a lot of this demand, with other market drivers including the growth in user data and increase in cloud penetration.

Nxtra is building multiple large data centres across the country to capture the significant growth opportunities in India. In 2019, company commissioned a state-of-the-art data centre in Pune and is expanding more across Chennai, Mumbai, and Kolkata. The funds from this transaction will be utilised by the company to continue scaling up its infrastructure and offerings across the country.

Mr Gopal Vittal, MD & CEO (India and South Asia), Bharti Airtel, said, “At Airtel, we have built a robust data centre portfolio that is future ready and scalable. For us, the security and data privacy requirements of our customers are our top priorities, which we have established as a key differentiator for our data centre offerings. Rapid digitization has opened a massive growth opportunity for data centres in India and we plan to accelerate our investments to become a major player in this segment. We are delighted to have Carlyle as a strategic partner in this exciting journey, particularly given their experience in this industry, and look forward to working with them."

Mr Neeraj Bharadwaj, Managing Director of the Carlyle Asia Partners advisory team, said, “India is set to become one of the largest markets in the world for digital services. 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."

Mr Greg Zeluck, Co-Head, Carlyle Asia Partners advisory team, added, “Airtel is a high-quality partner in India with whom Carlyle executives have built a strong and constructive relationship with over many years. We are delighted to be collaborating on this together, and believe Airtel’s nation-wide network and strong governance coupled with Carlyle’s data centre experience and operational capabilities creates a compelling partnership that will help Nxtra to capture growing demand as data usage continues to surge."