According to a recent report, the size of the Indian data center industry could double, and touch 2 GW, by 2026. The report was released by CareEdge, which is a knowledge-based analytical group offering services in Credit Ratings, Analytics, Consulting and Sustainability.
Readers would recall that earlier this year, a report by Cushman & Wakefield had previously said that the Indian data center market size had already touched 1 GW in the second half (H2) of 2023. According to the report by CareEdge Ratings, the data center industry has entered the growth stage, and the capacity is expected to double up in the next three years.
Maulesh Desai, Director, CareEdge Ratings expressed even greater optimism about the growth of the industry in the near future saying, “The industry is expected to see 5 GW capacity addition announcements over 5-6 years.” He further said, “Going forward, cost competencies, innovative designs to accommodate scalability and adoption of newer technologies to meet ever rising energy and cooling requirements are critical success factors for the industry.”
According to this report, this additional capacity built up has created substantial investment prospects “due to the estimated capex requirement of INR 50,000 crore in the next three years.”
“However, the project execution challenges, in terms of land and equipment availability and management of vendor ecosystem needs to be addressed for the fructification of the planned capacity addition planned,” warns Puja Jalan, Associate Director, CareEdge Ratings.
The report further found that capacity growth has been complemented by the increased absorption. It cited that the absorption levels have gone up from 82 percent in 2019 to 93 percent in 2023. “As capacity was added, industry players’ revenue increased by nearly 25% CAGR from FY17 to FY23. Over the next three to four years, revenue growth is anticipated to continue, with CareEdge Ratings projecting a 32% CAGR Growth during FY24–26,” said the report.
