Carlyle to acquire about 25% stake in Airtel’s Nxtra Data

This will peg the enterprise valuation of Nxtra at USD 1.2 billion

July 01, 2020 08:39 am | Updated 10:32 am IST - New Delhi

A Bharti Airtel building is pictured in Gurugram on the outskirts of New Delhi

A Bharti Airtel building is pictured in Gurugram on the outskirts of New Delhi

The U.S.-based Carlyle Group will acquire about 25% stake in Bharti Airtel's data centre business — Nxtra Data, for USD 235 million (about ₹1,780 crore). The deal values Nxtra Data at USD 1.2 billion or about ₹9,084 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 (together, ‘Carlyle’)  today announced an agreement under which Comfort Investments II will invest USD 235 million in Nxtra Data Limited, a wholly owned subsidiary of Airtel engaged in the data centre business,” Bharti Airtel said in a statement.

Also read: Adani, U.S. group to set up data centres in India

Post the transaction, the Carlyle Group will hold a stake of approximately 25% in the business, with Bharti Airtel continuing to hold the remaining stake of approximately 75%. The transaction, the company added, is subject to the necessary regulatory approvals, including approval from the Competition Commission of India.

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...Rapid digitization has opened up 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.”

The New-Delhi headquartered Nxtra Data offers secure data centre services to leading Indian and global enterprises, hyperscalers, start-ups, SMEs and governments. “Nxtra’s nation-wide portfolio of 10 large 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,” the company said.

Surge in demand in India

It added that India is witnessing a considerable surge in demand for secure data centres 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 propelling a lot of this demand, with other market drivers including the growth in user data and increase in cloud penetration, the company said.

“Nxtra is building multiple large data centres across the country to capture the significant growth opportunities in India. Last year, the Company commissioned a state of the art data centre in Pune and is building more across Chennai, Mumbai and Kolkata. Nxtra will use the proceeds from this transaction to continue scaling up its infrastructure and offerings across the country,” Bharti Airtel said.

The company added that Carlyle has prior experience in data centre ownership through investments in Coresite in the US and Itconic in Spain. The firm has deep local knowledge within India having been investing in the market since 2000, with notable investments including SBI Life, SBI Card, HDFC, India Infoline, Delhivery and PNB Housing Finance, as well as the recently announced Piramal Pharma Limited and SeQuent Scientific Limited. Carlyle had invested more than USD 2.5 billion in India as of March 31, 2020.

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