New Delhi . India's data center industry capacity may double to 2 to 2.3 GW by fiscal year 202627. The reason for this is the increase in investment in cloud due to increasing digitalization of the economy. This information was given in a report on Monday.
The demand will continue in the medium term due to the increasing penetration of Generative Artificial Intelligence (GenAI), the CRISIL Ratings report said.
The report further noted that incremental capital expenditure (capex) to support strong demand will see a higher proportion of debt funding, resulting in moderate growth in debt levels. However, capacity growth will outpace demand growth, keeping offtake risks low. As a result, the cash flow of the industry can remain good and stable, which will keep the credit profile of the companies stable.
CRISIL Ratings said the analysis is based on the industry's largest companies, which represent about 85 per cent of the market share in terms of operating efficiency.
The report said data centers meet the demand for computing and storage infrastructure, which is being driven by two primary factors. First, industries are rapidly shifting their businesses to digital platforms, including the cloud. There has been a boom after the Covid19 pandemic. Second, increasing access to highspeed data has led to increased use of the Internet, including social media, overthetop (OTT) platforms, and digital payments.
Mobile data traffic has grown at a compound annual growth rate (CAGR) of 25 percent over the last five financial years.
“An investment of Rs 55,00065,000 crore is required over the next three financial years to meet the growing data center demand, mainly on land and buildings, power equipment and cooling solutions,” said Manish Gupta, senior director, CRISIL Ratings. Will be spent.”
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Image Credit: KhasKhabar.