Key Takeaways
- KKR, Singtel and Tata Communications are exploring a sale of STT Global Data Centres India at a valuation exceeding $5.5 billion.
- The company operates 34 data centres across 10 Indian locations, with total IT capacity of 613 MW.
- The shareholders have appointed advisers to approach global data centre operators, Indian conglomerates and infrastructure investors.
- An Indian IPO remains an alternative, with an earlier valuation target of $6 billion to $7 billion.
- STT GDC India reported FY26 operating revenue of ₹2,747.5 crore, up 17.8%, while profit declined 22.9% to ₹126 crore.
- Hyperscalers contribute approximately 75% of the company’s revenue, supported by long-term contracts.
STT GDC India Sale Could Exceed $5.5 Billion
Private equity investor KKR, Singapore Telecommunications (Singtel) and Tata Communications are exploring a sale of STT Global Data Centres India (STT GDC India), one of the country’s largest colocation data centre operators.
According to The Economic Times, the shareholders have appointed advisers to explore a potential transaction at a valuation exceeding $5.5 billion.
The proposed sale could attract interest from several categories of buyers, including international data centre operators, Indian conglomerates planning large investments in digital infrastructure, infrastructure-focused funds and private equity investors.
The transaction would be significant for India’s data centre industry because it would bring a large operating portfolio to the market at a time when demand for computing infrastructure is increasing.
However, the sale is still at the exploration stage. The shareholders have not announced a completed transaction or identified a preferred buyer.
The owners are also considering an alternative route through an Indian initial public offering (IPO), making the process a dual-track exercise involving both strategic sale discussions and public-market options.
Who Owns STT GDC India?
STT GDC India operates through a joint venture between STT Global Data Centres and Tata Communications.
The ownership structure is:
| Shareholder | Ownership |
|---|---|
| STT Global Data Centres | 74% |
| Tata Communications | 26% |
STT Global Data Centres is controlled by KKR and Singtel. Following the completion of their acquisition in September 2026, KKR holds 75% of the global parent, while Singtel owns the remaining 25%.
This means KKR and Singtel control the majority shareholder of the Indian business, while Tata Communications retains a direct 26% stake.
The ownership structure has evolved over the past decade.
In 2016, STT entered India by acquiring a controlling 74% stake in Tata Communications’ domestic data centre business. The transaction valued the business at approximately ₹3,140 crore and covered 14 data centres.
Tata Communications retained its minority holding and continued investing in the business as it expanded.
In FY26, Tata Communications invested an additional ₹319.4 crore to maintain its 26% stake.
STT GDC India Operates 34 Data Centres Across 10 Locations
STT GDC India has expanded significantly since its entry into the domestic market.
The company currently operates:
| Business indicator | Details |
|---|---|
| Number of data centres | 34 |
| Indian locations | 10 |
| Total IT capacity | 613 MW |
| Share of revenue from hyperscalers | Approximately 75% |
| Typical hyperscaler contract duration | 7–15 years |
Its facilities provide colocation services, allowing businesses to place their servers and computing equipment inside professionally managed data centres.
Customers use these facilities for cloud computing, enterprise applications, financial services, telecommunications, digital media and other technology requirements.
The company’s large operating footprint is an important attraction for potential buyers.
Building a comparable portfolio from scratch requires significant investment in land, electricity infrastructure, cooling systems, networking equipment, construction and regulatory approvals.
An acquisition can give investors immediate access to operational facilities, existing customers and established contracts.
FY26 Revenue Rises 17.8%, but Profit Declines
STT GDC India’s financial performance shows continued revenue expansion, although profitability has faced pressure.
According to disclosures in Tata Communications’ FY26 annual report, the data centre business reported revenue from operations of ₹2,747.5 crore in FY26, compared with ₹2,331.8 crore in FY25.
This represents year-on-year growth of approximately 17.8%.
However, profit declined to ₹126 crore from ₹163.5 crore, a reduction of approximately 22.9%.
| Financial indicator | FY25 | FY26 |
|---|---|---|
| Revenue from operations | ₹2,331.8 crore | ₹2,747.5 crore |
| Profit | ₹163.5 crore | ₹126 crore |
| Net assets | ₹4,406.2 crore | ₹5,760.5 crore |
Net assets increased by approximately 30.7% during the period.
The combination of higher revenue and lower profit highlights the capital-intensive nature of data centre operations. Expansion requires substantial investment in buildings, power infrastructure, cooling systems and equipment.
The company has also been increasing its capacity to accommodate customers seeking larger computing installations.
For prospective investors, the most important valuation considerations will include contracted EBITDA, future capital expenditure, utilisation rates, customer concentration and the ability to convert new capacity into operating earnings.
Why the Shareholders Are Exploring a Sale
The proposed transaction is linked to the shareholders’ capital requirements and their wider investment strategies.
KKR and Singtel have been expanding STT Global Data Centres across multiple international markets, including India, Southeast Asia and Europe.
The global platform requires substantial investment to develop new facilities and secure additional capacity for cloud and AI customers.
Monetising the Indian business could help the shareholders unlock value from an established asset while reallocating capital towards other expansion opportunities.
Tata Communications also has a separate strategic consideration.
The Tata Group has been developing an independent data centre platform involving Tata Consultancy Services (TCS) and private equity investor TPG.
A potential sale of its stake in STT GDC India could help Tata Communications and the wider group streamline their involvement in the data centre business.
However, no final decision on the sale has been publicly confirmed.
IPO Remains an Alternative to a Strategic Sale
The shareholders had already started evaluating an Indian stock market listing around July 2026.
According to The Economic Times, the proposed IPO was being considered at a valuation of approximately $6 billion to $7 billion.
Advisers were reportedly appointed to explore the listing, with an offering potentially raising $800 million to $1 billion, subject to market conditions.
The proposed private sale valuation of more than $5.5 billion is somewhat below the earlier IPO valuation range.
Exploring both options gives shareholders an opportunity to compare the value offered by strategic buyers with the valuation that public-market investors might support.
An IPO could provide an exit route while allowing the business to remain independently listed. A strategic sale, on the other hand, could give existing shareholders a more direct route to monetise their investment.
The final decision will depend on buyer interest, valuation expectations, financing conditions and the outlook for India’s data centre industry.
Why Data Centres Are Attracting Global Investors
Data centres have become strategically important because they provide the physical infrastructure required to operate cloud platforms, AI models and digital services.
The rapid expansion of generative AI has increased demand for computing capacity, high-speed networking, advanced cooling and reliable electricity.
Large technology companies and hyperscalers are investing billions of dollars to expand their AI infrastructure.
India is becoming an important market in this investment cycle.
According to the Economic Times report, India’s data centre capacity is expected to increase from approximately 1.26 GW to more than 2 GW by 2027.
The report also cited CBRE projections that investment in the sector could exceed $100 billion by 2027.
Companies including Google and OpenAI have outlined major expansion plans in India, while Reliance Industries has announced a proposed $30 billion data centre investment programme.
Other domestic and international operators, including Bharti Airtel, Adani, NTT and CtrlS, are also expanding their presence.
For investors, the sector offers exposure to long-term demand for cloud computing, AI infrastructure and enterprise digital services.
Valuation: Why STT GDC India Could Command a Premium
Data centre valuations are increasingly influenced by contracted earnings rather than only current revenue.
The Economic Times reported that data centres in the Asia-Pacific region have been valued at approximately 18–20 times contracted EBITDA.
The report also cited Blackstone and Canada Pension Plan Investment Board’s acquisition of Australia’s AirTrunk in 2024, which valued the business at approximately 22–23 times contracted EBITDA.
STT GDC India is seeking a valuation that reflects the scale of its operations and long-term customer agreements.
Approximately 75% of its revenue comes from hyperscalers, with contracts typically running between seven and 15 years.
Long-term agreements can provide greater revenue visibility and make data centre businesses attractive to infrastructure investors.
However, valuation multiples based on contracted EBITDA should not be directly compared with conventional revenue or net-profit multiples. Contracted earnings, future construction commitments, debt and the timing of capacity delivery all influence the final transaction value.
The Bigger Picture
The proposed STT GDC India sale highlights the growing financial value of digital infrastructure in India. Data centres are no longer viewed simply as real estate assets; they are critical infrastructure supporting cloud computing, AI, financial services and the wider digital economy.
The transaction could also establish an important valuation benchmark for India’s data centre industry. If shareholders secure a premium valuation, it may encourage other investors to monetise established infrastructure portfolios or pursue consolidation. At the same time, the company’s substantial expansion requirements and declining FY26 profit show why buyers will examine cash generation and future capital commitments closely.
Looking Ahead
The immediate focus will be on the buyers approached by the advisers and whether any strategic or financial investor makes a firm offer. The shareholders will also need to compare private-sale proposals with the previously explored IPO option. No buyer or final transaction timeline has been announced.
For India’s data centre industry, the proposed sale could become a landmark transaction and attract additional international capital. Its eventual valuation will depend on the quality of STT GDC India’s customer contracts, earnings, operating capacity and expansion pipeline, as well as investor expectations for the country’s AI and cloud infrastructure market.
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