Asia News Jul 02

India’s Airtel arm attracts US PE investor

Carlyle Group to pick up 25% stake in Bharti Airtel's subsidiary Nxtra Data, writes KS Kumar

India’s Airtel arm attracts US PE investor
Sunil Bharti Mittal, the founder of Bharti Enterprises. Photo: AFP

As India undergoes a rapid digital transformation, led by increasing broadband internet usage and data consumption, telecom companies are strengthening their data portfolio. In the latest development, US-based private equity firm Carlyle Group is set to pick up 25% stake in telecom major Bharti Airtel’s subsidiary Nxtra Data.

The enterprise valuation of Delhi-based Nxtra for this deal is approximately $1.2 billion and the US firm will be investing $235 million. Nxtra has 10 large data centers and more than 120 edge data centers across the country. 

Its clients include leading Indian and global enterprises, start-ups, small and medium-sized enterprises and governments. Nxtra provides customers with co-location services, cloud infrastructure, managed hosting, data backup, disaster recovery, and remote infrastructure management.

Nxtra will use the proceeds from the deal to scale up its infrastructure, the companies said. Prior to that the deal will be subjected to the necessary regulatory approvals, including a go-ahead from the Competition Commission of India.

India is seeing a surge in demand for data centers as more businesses choose cloud computing, and consumer demand for digital services such as smartphone entertainment continues to grow. Cloud and entertainment services represent the next revenue frontier for traditional telecom carriers like Airtel, as voice and data rates in India remain among the cheapest in the world.

“Rapid digitization has opened up a massive growth opportunity for data centers in India and we plan to accelerate our investments to become a major player in this segment. We are delighted to have Carlyle as a strategic partner in this exciting journey, particularly given their experience in this industry, and look forward to working with them,” said Gopal Vittal, MD & CEO (India and South Asia), Bharti Airtel.

Neeraj Bharadwaj, managing director of the Carlyle Asia Partners advisory team, said, “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 centers in India. We look forward to collaborating with Airtel to unlock the full potential of Nxtra.”