KKR, Singtel, and Tata Communications to Sell STT GDC India for Over $5.5 Billion

KKR, Singtel, and Tata Communications are set to initiate the sale of STT Global Data Centres India Private Ltd, one of the top three co-location providers in the country, with expectations of a valuation surpassing $5.5 billion. This move aims to unlock value and address capital requirements amid a surge in global demand for data infrastructure.

STT GDC India operates 34 data centres across ten locations, with a total capacity of 613 megawatts. The sale is part of a dual-track strategy that includes exploring an initial public offering (IPO) valued at $6-$7 billion, which was evaluated earlier this year. Advisors have been engaged to facilitate the sale process, targeting both global players and Indian conglomerates interested in expanding their data centre capabilities.

The data centre market in Asia Pacific has seen significant valuations, with recent transactions indicating multiples of 18-20 times contracted EBITDA. STT GDC India anticipates similar valuations, aiming for at least $5 billion, slightly below its IPO target.

The consortium of KKR and Singtel previously announced a $5.2 billion buyout to gain full control of ST Telemedia Global Data Centres, which indicates their commitment to expanding their data centre footprint. The Indian arm of STT GDC is a joint venture between STT Telemedia and Tata Communications, with Tata retaining a 26% stake.

As the demand for data centres continues to rise, particularly from hyperscalers, the Indian market is projected to grow significantly. Current estimates suggest that data centre capacity in India could increase from 1.26 gigawatts to over 2 gigawatts by 2027, necessitating substantial investment. Major players, including Reliance Industries, are also making significant commitments to the sector, further indicating a robust growth trajectory for data infrastructure in the region.