Bharti Airtel proposes to sell 25% stake in data centre unit for US$235m

PRIVATE equity giant The Carlyle Group is looking to acquire a 25 per cent stake in data centre company Nxtra Data, wholly owned by Singtel's Indian associate Bharti Airtel, for US$235 million.

Comfort Investments II will invest the sum in Nxtra under the proposed deal. Comfort Investments II is an affiliated entity of investment fund CAP V Mauritius, which is managed and advised by affiliated entities of Carlyle.

The transaction is subject to the necessary regulatory approvals, including approval from the Competition Commission of India, according to a joint Bharti Airtel-Carlyle statement shared by Singtel as a regulatory update on Wednesday.

Nxtra is engaged in the data centre business and will have a post-money enterprise valuation of US$1.2 billion, Bharti Airtel and Carlyle said. 

Headquartered in New Delhi, Nxtra offers secure data centre services to leading Indian and global enterprises, hyperscalers, startups, small and medium enterprises and governments.

Proceeds from the transaction will be used to scale up Nxtra's infrastructure and offerings across India. 

Nxtra has a nationwide portfolio of 10 large data centres and more than 120 edge data centres providing customers with co-location services, cloud infrastructure, managed hosting, data backup, disaster recovery, and remote infrastructure management.

It is building up multiple large data centres across the country to capture "significant growth opportunities" in India. Last year, Nxtra commissioned a data centre in Pune and is building more across Chennai, Mumbai and Kolkata.

Gopal Vittal, Bharti Airtel managing director and chief executive of India and South Asia, said: "Rapid digitisation has opened up a massive growth opportunity for data centres in India and we plan to accelerate our investments to become a major player in this segment."

Neeraj Bharadwaj, Carlyle Asia Partners advisory team managing director, said that India is set to become one of the largest markets in the world for digital services.

"Airtel, with its proven track record of solid execution and customer focus, is well-positioned to leverage the potential growth of data centres in India," he noted.

Singtel shares were trading S$0.02 or 0.8 per cent higher at S$2.48 as at 4.08pm on Wednesday on a cum-dividend basis.