This big data center company is going to be sold with the participation of Tata, the deal will be more than 52 thousand crore rupees.

The biggest ever deal in India’s data center sector is about to happen. STT Global Data Centers India Private Limited (STT GDC India), one of the top-3 co-location providers in the country, is up for sale. The company’s major shareholders, including private equity group KKR, Singtel and Tata Communications, have begun the process of selling its domestic operations. According to media reports, this deal could be worth more than 5.5 billion dollars (about 52 thousand crore rupees). This is the first time such a large portfolio of data centers has come up for sale in India. The company currently has 34 data centers across 10 cities in the country, with a total capacity of 613 megawatts (MW).

Shareholders are working on a dual plan

This multi-billion dollar deal is part of a dual strategy. This, while balancing capital requirements globally, will also help the Tata group realign its data center plans. Advisors are included on board for this sale process. These consultants will approach global players present in India or planning to enter, large Indian business houses, infrastructure funds and private equity investors.

Notably, around July shareholders started exploring the possibility of an Indian IPO with a valuation of around $6 to 7 billion. Compared to the IPO value, the company expects at least $5 billion from its direct sale. Data centers in Asia Pacific are valued at 18-20 times their contracted EBITDA. In September 2024, Blackstone and CPPIB bought Australia’s AirTrunk for $16 billion, 22-23 times its EBITDA. STT GDC also expects a similar assessment. KKR and STT GDC India declined to comment on the matter, while mails sent to Singtel and Tata Communications went unanswered.

The partnership with Tata started in 2016

In February this year, KKR and a Singtel consortium announced a $5.2 billion cash buyout to gain full control of ST Telemedia Global Data Centers (STT GDC). Based on the price paid for the remaining 82 percent stake, the company’s enterprise value was estimated at $10.2 billion. Currently, KKR owns 75 per cent stake in parent company STT GDC, while Singtel holds the rest. Their Indian unit (STT GDC India) is a 74:26 percent joint venture between STT Telemedia and Tata Communications.

Tata Group has already decided to launch an independent data center platform with TPG and its flagship company TCS. In 2016, Singaporean company STT entered India by buying a 74 percent stake in Tata Communications’ Indian data center business, while Tata retained a 26 percent stake. At that time the value of this business was Rs 3,140 crore. At the time, the deal involved 14 data centers, which accounted for about 28.5 percent of the Indian market.

To maintain its 26 per cent stake, Tata Communications will invest Rs. An additional investment of 319.4 crores was also made. In September 2024, the company plans to add 550 MW of capacity over 5-6 years at a cost of Rs. 26,000 crore investment was announced.

A company’s income statement

Today, about 75 percent of the company’s total revenue comes from hyperscalers, whose contracts are typically for 7 to 15 years. The management has during the financial year 2026-2027 Rs. 6,000 to Rs. 6,100 crore was estimated for capital expenditure (capital expenditure), which was to be met through debt, internal earnings or equity. Over the last five years (FY21-FY25), the company has seen a compound annual growth (CAGR) of 15 percent in operating income.

According to Tata Communications’ annual report, operational revenue of STT’s Indian business is expected to grow by 17.8 percent in FY2026 to Rs. 2,747.5 crore, which was Rs. 2,331.8 crores. However, the profit during this period was Rs. 163.5 crores decreased by 22.9 percent to Rs. 126 crores. The net assets of the company are Rs. 4,406.2 crore increased by 30.7 percent to Rs. 5,760.5 crores. Outside India, STT Group has core businesses in Asia and Europe, where it operates more than 100 data centers with a capacity of more than 2 gigawatts (GW).

By the end of 2025, its operational capacity has increased by 25 percent to 780 MW, while contracted capacity has increased by 50 percent. The company’s top 10 customers contribute about 76 percent of its total revenue.