Data Centers: Digital and AI Demand Fuel a Capacity Boom

Overview

India is among the fastest-growing data-center markets globally, propelled by cloud adoption, data-localisation norms, digital-services penetration and, increasingly, AI compute demand. Installed IT capacity is rising rapidly, concentrated around Mumbai, Chennai, Hyderabad and emerging edge locations. Hyperscalers, colocation operators and REIT-style capital are all active.

AI is reshaping the demand curve toward higher-density, GPU-ready facilities with advanced power and cooling. Power availability, land and connectivity (submarine cable landings) are the gating factors; access to renewable power is becoming a differentiator. Capital is abundant, with global infrastructure funds and domestic conglomerates competing for scale.

The business is real-asset-like - long leases, sticky hyperscale anchors and high capital intensity. Returns depend on securing power, prime land and creditworthy anchor tenants ahead of the demand curve.

Key Players

Investment Outlook

Data centers combine secular digital demand with real-asset economics, making them one of the more attractive infrastructure themes, subject to power and land constraints. We prefer operators with secured power, hyperscale anchors and disciplined capital deployment.

All figures are indicative and for information only - not investment advice or a recommendation. Market sizes, growth rates and financial metrics are hedged estimates that vary by source and period. Please consult your advisor before investing.