Key Takeaways
- • KKR, Singtel and Tata Group are preparing to sell STT GDC India, one of the country's top three colocation providers, in a transaction valued at over $5.5 billion, according to people familiar with the matter cited by The Economic Times.
- • STT GDC India operates 34 data centres across 10 locations in India with total capacity of 613 MW, and the sale would be the first time a portfolio of this size has been offered in the country.
- • The sponsors expect valuations of roughly 18-20x contracted EBITDA, in line with Asia Pacific data centre transactions, and the company expects at least $5 billion, a slight discount to its earlier $6-7 billion IPO target.
- • The sale is part of a dual-track process alongside a possible Indian IPO, with advisors appointed and bidders expected to include global operators, Indian conglomerates and infrastructure and buyout funds.
- • FY26 revenue from operations rose 17.8% to Rs 2,747.5 crore, though profit fell 22.9% to Rs 126 crore, and hyperscalers account for roughly 75% of revenue.
Summary
KKR, Singtel and Tata Group, the key shareholders of STT Global Data Centres India Private Ltd (STT GDC India), are initiating plans to sell the Indian business, according to people in the know cited by The Economic Times. The company is among the top three co-location providers in India, with 34 data centres across 10 centres and a total capacity of 613 MW. The potential transaction, reported at over $5.5 billion, is described as the first time a portfolio of this scale has been offered in India, as hyperscalers and data centre infrastructure providers build capacity rapidly.
The sale is part of a dual-track initiative to rebalance capital requirements and help Tata streamline its data centre plans. Advisors have been appointed to run a process that will target global players either present in or planning to enter India, Indian conglomerates with large data centre investment plans, and financial sponsors including infrastructure funds and buyout firms. In parallel, shareholders had begun evaluating an Indian IPO valuing the business at $6-7 billion around July. Sources said STT GDC expects at least $5 billion, a slight discount to that IPO value. Asia Pacific data centres have reportedly been valued at 18-20x contracted EBITDA, while Blackstone and CPPIB's $16 billion acquisition of AirTrunk in September 2024 was valued at 22-23x contracted EBITDA. KKR declined to comment, and Singtel and Tata Communications did not respond to requests for comment.
The Indian business is a 74:26 joint venture between STT Telemedia and Tata Communications. STT acquired a controlling 74% stake in 2016 when the business was valued at Rs 3,140 crore; the acquisition covered 14 data centres. In September 2024, Tata Communications announced a Rs 26,000-crore investment commitment to add 550 MW over five to six years. Hyperscalers account for about 75% of revenue, with contracts typically running 7-15 years. According to Tata Communications' annual report, FY26 revenue from operations was Rs 2,747.5 crore, up 17.8% from Rs 2,331.8 crore, while profit declined 22.9% to Rs 126 crore and net assets rose 30.7% to Rs 5,760.5 crore. Sources said contracted EBITDA would be significantly higher given the recent ramp-up.
The sale comes after KKR and Singtel announced in February a $5.2 billion cash buyout of the remaining 82% of ST Telemedia Global Data Centres at an implied enterprise value of $10.2 billion. Market context is mixed: India's data centre capacity is expected to rise from 1.26 GW to over 2 GW by 2027, with total industry investment projected to exceed $100 billion by 2027 according to CBRE, but Sify Infinit Spaces' proposed IPO faces a valuation gap, and several infrastructure listings have reportedly been paused.
The sale is part of a dual-track initiative to rebalance capital requirements and help Tata streamline its data centre plans. Advisors have been appointed to run a process that will target global players either present in or planning to enter India, Indian conglomerates with large data centre investment plans, and financial sponsors including infrastructure funds and buyout firms. In parallel, shareholders had begun evaluating an Indian IPO valuing the business at $6-7 billion around July. Sources said STT GDC expects at least $5 billion, a slight discount to that IPO value. Asia Pacific data centres have reportedly been valued at 18-20x contracted EBITDA, while Blackstone and CPPIB's $16 billion acquisition of AirTrunk in September 2024 was valued at 22-23x contracted EBITDA. KKR declined to comment, and Singtel and Tata Communications did not respond to requests for comment.
The Indian business is a 74:26 joint venture between STT Telemedia and Tata Communications. STT acquired a controlling 74% stake in 2016 when the business was valued at Rs 3,140 crore; the acquisition covered 14 data centres. In September 2024, Tata Communications announced a Rs 26,000-crore investment commitment to add 550 MW over five to six years. Hyperscalers account for about 75% of revenue, with contracts typically running 7-15 years. According to Tata Communications' annual report, FY26 revenue from operations was Rs 2,747.5 crore, up 17.8% from Rs 2,331.8 crore, while profit declined 22.9% to Rs 126 crore and net assets rose 30.7% to Rs 5,760.5 crore. Sources said contracted EBITDA would be significantly higher given the recent ramp-up.
The sale comes after KKR and Singtel announced in February a $5.2 billion cash buyout of the remaining 82% of ST Telemedia Global Data Centres at an implied enterprise value of $10.2 billion. Market context is mixed: India's data centre capacity is expected to rise from 1.26 GW to over 2 GW by 2027, with total industry investment projected to exceed $100 billion by 2027 according to CBRE, but Sify Infinit Spaces' proposed IPO faces a valuation gap, and several infrastructure listings have reportedly been paused.
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