Carlyle looks to sell stake in Airtel's Nxtra – reports

Global investment firm Carlyle is planning to sell its 24% stake in Nxtra Data, the data center arm of India's second-largest service provider, Bharti Airtel, according to a media report. Carlyle acquired the stake for around 17.8 billion Indian rupees (US$214 million) in 2020.

The media report hints that Carlyle is getting offers of around $642 million, triple the amount it invested in Nxtra. This is hardly surprising, considering the Indian data center industry is recording exponential growth on the back of the growing data consumption and digitization of enterprises.

The Indian data center market size is likely to grow from 2,010MW in 2024 to touch 4,770MW by 2029, according to Mordor Intelligence. The growth is fuelled by the popularity of video content, online gaming, as well as over the top (OTT) and fintech applications.

Nxtra has recorded consistent growth over the last few years, promising to offer good returns to Carlyle if it plans to exit the investment.

The company operates 12 large data centers, two hyperscale data centers and over 120 edge data centers in the country. It is planning to invest INR50 billion ($602 million) over the next few years to develop six new hyperscale data centers across metropolitan areas in India to double its capacity to over 400MW. Nxtra recently launched operations in Nigeria in Africa, where Airtel has a strong presence.

The acceleration of enterprises' digital transformation after the outbreak of COVID-19 has contributed to growing demand, as has the emergence of 5G coupled with growing adoption of the Internet of Things (IoT) and AI. The data localization norms in India are also adding to the growing demand for data centers.

Nxtra benefits from being part of the Bharti Airtel, which has over 1,200 enterprise customers in the country.

The company was in the news recently for signing two new agreements to procure renewable energy. It has signed a power-wheeling agreement with Ampln and Amplus Energy to acquire 140,208 MWh of additional renewable energy. As part of the agreement, AmpIn Energy and Amplus Energy will set up captive power plants with 48MWdc solar capacity and 24.3MW wind capacity for Nxtra's data centers in the states of Tamil Nadu, Uttar Pradesh and Odisha.