India's Data Centre Market Attracts Over $6.5 Billion Investment in a Decade

India's data centre (DC) sector has drawn more than $6.5 billion in investment commitments between 2014 and 2024 via private equity, joint ventures, and acquisitions, based on the report released by Anarock Capital. The sector has seen impressive growth, with its capacity increasing 139% from 590 MW in 2019 to 1.4 GW in 2024.

This swift growth is fueled by mounting internet penetration that has improved from 33.4% in 2019 to 55.2% in 2024 and with a drastic hike in per user data consumption from 11.5 GB to 21.1 GB of data a month. The traffic of data on mobile phones also surged from 13 GB to 32 GB, making India the leader worldwide in the consumption of mobile data. Devi Shankar, Executive Director - Industrial, Logistics, and Data Centres at Anarock Capital, said that the high mobile data traffic per smartphone in India has had a critical impact on demand for high-grade data centres as a testament to the country's increasing digital consumption and the accelerating demand for durable data infrastructure.

Mumbai and Chennai continue to lead the market with 70% of India's total IT power capacity, with Mumbai contributing 49% alone. The report indicates remarkable supply growth during 2022-2024, with Mumbai seeing a 92% increase, and Chennai recording a staggering 340% increase. These additions have created a total occupancy of 76%, reflecting high market absorption and operating efficiency.

India has also become a hotbed for hyperscale data centers, with the 'own-and-operate' model picking up pace. In the last five years, about 440 acres of land have been purchased in Hyderabad, Mumbai, and Pune for establishing hyperscalers. The growing need for cloud computing, artificial intelligence (AI), and big data processing is likely to fuel this trend.

The Indian data centre market is worth $10 billion currently and generated revenue of $1.2 billion in FY 2024. The four large DC operators contribute to 78% of the revenue. Although the growth in EBITDA began to plateau after 2020, estimates are that there would be a 50-55% increase when under-construction projects stabilize, opined Shobhit Agarwal, MD & CEO, Anarock Capital.

With growing data usage, robust investment inflows, increasing hyperscaler presence, and a strategic shift towards AI and sustainability, India is poised to emerge as a global data infrastructure powerhouse in the coming years.