L&T to set up 3 new data centers for ₹3,600cr
What's the story
Leading industrial conglomerate Larsen & Toubro (L&T) has announced plans to invest up to ₹3,600 crore in setting up three new data centers.
Seema Ambastha, CEO of L&T Cloudfiniti, disclosed that the investment will give a massive boost to the company's capacity from the current 32MW to an ambitious target of 150MW by 2027.
The proposed sites for the facilities are Bengaluru, Panvel, and Mahape.
Expansion plans
Current and future data center locations
L&T already has data centers in Mumbai and Chennai with a total capacity of 32MW. The company's subsidiary L&T Cloudfiniti also offers end-to-end solutions for data center operations.
This expansion plan comes as part of a larger trend in India's booming data center market. The growth, fueled by digitalization and AI adoption, is drawing massive investments from global and domestic players alike.
Cost control
Cost factors and future trends
Ambastha said that the existing cost of setting up a new data center in India is between ₹35-40 crore per MW.
She stressed the need to control capital costs and optimize resources to ensure returns aren't compromised.
The expansion of the 5G network and entry of data providers like Elon Musk's Starlink is expected to drive down costs by enabling data centers in tier 2, 3 cities.
Market dynamics
Impact of competition and tariffs on data center industry
Ambastha also highlighted that increasing competition has brought down rental rates for data centers. Despite concerns over US tariffs on steel and aluminum potentially disrupting supply chains and pushing back project timelines, Ambastha doesn't foresee any impact on the data center industry from these tariffs.
Market growth
Investment trends in India's data center sector
Several big players like Blackstone, Amazon Web Services (AWS), CapitaLand, Reliance Industries, and Adani Group have invested in India's burgeoning data center space.
AWS recently announced ₹60,000 crore investment in Telangana for new data centers. Blackstone also plans a 150MW facility in Telangana with a ₹4,500 crore investment.
India's operational data center capacity is expected to grow significantly by March 2027, according to ICRA's estimates, requiring massive investments over FY25 and FY26.