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Informist, Thursday, Jul. 2, 2026

 

By Shakshi Jain and Abhijit Doshi

 

NEW DELHI – Hiranandani Group-backed Yotta Data Services Pvt. Ltd. hopes to file its draft red herring prospectus with the Securities and Exchange Board of India within the next two weeks, company Co-founder, Managing Director and Chief Executive Officer Sunil Gupta said in an exclusive interview with Informist Wednesday. The data centre operator aims to raise between $1.2 billion and $1.5 billion from the initial public offering and the pre-IPO funding round, a majority of which is likely to come from the latter, according to Gupta. 

 

As part of the ongoing pre-IPO fundraise, Yotta Data Services has secured $150 million from global family offices alone in two months and the Mumbai-based company is now targeting large funds in international markets. Given the "phenomenal" response so far, Gupta believes the company may very well exceed the target set for the exercise.

 

Unless the market regulator raises any red flags, Yotta Data Services should make a debut on the bourses towards the end of the calendar. "So, if everything goes well and there's not much queries from SEBI, then it can be as early as October-November when you actually get into listing. But if let's say it goes beyond that, then obviously it becomes February. What we have been advised is (in) December-January, nobody lists," Gupta said.

 

Yotta Data Services has engaged six investment banks to manage the offer, which will comprise only a fresh issue of shares. It plans to use the net proceeds of the IPO for partial repayment of debt and investing in the first two layers of business offerings, meaning building additional data centres equipped with mechanical, electrical, and plumbing infrastructure, and expanding the cloud and managed services segment. The top layer, which entails services tied to artificial intelligence and graphics processing units, will be supported by off-balance-sheet funding, Gupta said. At the same time, given the capex-heavy nature of the business, debt from the banking system will always have a role in the company's strategy, according to the chief executive. 

 

For context, the first layer of the service offering, that is, colocation, involves a capital expenditure of $6 million per megawatt, as per Gupta. This increases to $20 million per megawatt in the second layer when a company turns into a cloud operator and further to $40 million per megawatt in the top layer, which includes services such as on-demand, cloud-based access to high-performance graphics processing units.

 

Yotta Data Services has invested $1.8 billion so far and intends to infuse about $6 billion over the next 12 months and more than $40 billion over five years towards infrastructure expansion. The company expects to operate over 80,000 next-generation GPUs by the end of 2026-27 (Apr-Mar) and develop the ability to host more than 400,000 such processors over five years.

 

At the same time, Yotta Data Services is keen on reducing financial leverage to move towards a more reasonable debt-to-equity ratio. In terms of financial performance, Gupta said the company expects a compound annual growth rate of 90-100% by FY30. It also hopes to turn profitable in the same time frame. Based on the projections for the ongoing financial year, the company is likely to become the third-largest hyperscaler in India, according to Gupta.

 

RISING TRACTION, COMPETITION

 

Fuelled by a global artificial intelligence race and calls for data sovereignty, India's data centre market is witnessing increasing investments and rapid capacity expansion. Besides growing aspirations of existing players offering infrastructure or colocation services, the industry has seen the entry of new players, including business conglomerates such as Reliance Industries Ltd. and Adani Enterprises Ltd. However, Gupta, who is often called the "Data Centre Man of India," seems unfazed by the rising competition. It is not easy to operate a data centre, which is why most players are partnering with local or global players, he said. 

 

Gupta's strategy favours the top two layers of offerings in the industry – sovereign cloud and managed services, and GPU-intensive AI compute services. "That is like a blue ocean for me. There's no competition there. I'd start directly competing with hyperscalers there. Compared to hyperscalers, my pitch is sovereign and there are so many takers, especially government," he said.

 

Hyperscalers are large-scale cloud service providers that offer scalable and flexible computing infrastructure to businesses and organisations. A hyperscale data centre is a facility designed to efficiently scale up or down in response to the massive and variable demands of cloud computing.

 

Yotta Data Services has 900-plus enterprise clients today alongside a strong focus on government and global customers. The company has a land bank spanning 100 acres in Mumbai, of which more than 80 acres remain unutilised. In the National Capital region, barely 33% of the 20-acre land parcel, master-planned to host six interconnected data centres, is currently in use. "Two buildings are operational. I can still make four buildings, but there are adjacent plots available, which are on offer to us and if as the business grows, we can scale there as well," Gupta said, adding that the company plans to develop a 50-acre campus in Chennai, too.

 

Owing to this option of brownfield expansion in its existing campuses, the company commands a 20-25% premium over prevailing market rates for colocation. Gupta, however, said the internal rate of return in the segment has plummeted to 10-11% from 18-19% a decade ago, due to rising competition. "Today, we can count 20 operators who are sort of data centre operators or co-operators. Because of 20-plus operators chasing three customers, which is Amazon, Azure, Google, commoditisation has come in. Pricing pressure has come in," he added.

 

A colocation data centre is a shared facility where businesses rent physical space, such as racks, cabinets, or cages, to house their own servers and information technology hardware. As opposed to maintaining a private facility, companies leverage the provider's enterprise-grade power, cooling, physical security, and high-speed network connectivity.

 

On the business impact from the war in West Asia, Gupta highlighted a silver lining. "Many customers, European customers or Middle East customers, who otherwise were thinking of running their AI operations in the data centres in the Middle East (West Asia), their enquiries are coming to us now in India," he said.   End

 

US$1 = INR 95.39

 

Edited by Deepshikha Bhardwaj

 

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