The Carlyle Group will invest $235 million for approximately 25 percent stake in Nxtra Data Ltd, a wholly-owned subsidiary of Bharti Airtel engaged in the data centre business.
Bharti Airtel (“Airtel”), India’s largest integrated telecommunications operator, and Comfort Investments II, an affiliated entity of CAP V Mauritius Limited, an investment fund managed and advised by affiliated entities of The Carlyle Group (NASDAQ: CG) (together, “Carlyle”) today announced an agreement under which Comfort Investments II will invest US$235 million in Extra Data Limited (“Nxtra”), a wholly-owned subsidiary of Airtel engaged in the data center business.
The post-money enterprise valuation of Nxtra is approximately US$1.2 billion and Carlyle will hold a stake of approximately 25% in the business upon completion of the transaction, with Airtel continuing to hold the remaining stake of approximately 75%. The transaction is subject to the necessary regulatory approvals, including approval from the Competition Commission of India.
Headquartered in New Delhi, Nxtra from Airtel offers secure data centre services to leading Indian and global enterprises, hyperscalers, start-ups, SMEs and governments. Nxtra’s nation-wide portfolio of 10 large data centres and more than 120 edge data centres provides customers with co-location services, cloud infrastructure, managed hosting, data backup, disaster recovery, and remote infrastructure management.
India is witnessing a considerable surge in demand for secure data centers as businesses undertake digital transformation and consumer demand for digital services continues to increase. The expansion of hyperscalers across the region following the government’s directive on data localization is propelling a lot of this demand, with other market drivers including the growth in user data and an increase in cloud penetration.
Nxtra is building multiple large data centers across the country to capture the significant growth opportunities in India. Last year, the Company commissioned a state of the art data center in Pune and is building more across Chennai, Mumbai, and Kolkata. Nxtra will use the proceeds from this transaction to continue scaling up its infrastructure and offerings across the country.
Greg Zeluck, Co-Head, Carlyle Asia Partners advisory team, added: “Airtel is a high quality partner in India with whom Carlyle executives have built a strong and constructive relationship with over many years. We are delighted to be collaborating on this together, and believe Airtel’s nation-wide network and strong governance coupled with Carlyle’s data centre experience and operational capabilities creates a compelling partnership that will help Nxtra to capture growing demand as data usage continues to surge.”
Airtel is the largest player in India’s enterprise connectivity segment and serves over 2,500 large businesses and over one million medium and small businesses.
Carlyle has prior experience in data center ownership through investments in Coresite in the US and Itconic in Spain. The firm has deep local knowledge within India has been investing in the market since 2000, with notable investments including SBI Life, SBI Card, HDFC, India Infoline, Delhivery, and PNB Housing Finance, as well as the recently announced Piramal Pharma Limited and SeQuent Scientific Limited. Carlyle had invested more than US$2.5 billion in India as of March 31, 2020.