Carlyle unit to take 25% stake in Airtel’s data centre business for $235 million

The Carlyle Group-owned Comfort Investments II will acquire 25% stake in Bharti Airtel's data centre business, Nxtra Data Ltd, for $235 million, the Sunil Bharti Mittal-owned telecom company said on Wednesday.

Following the transaction, Airtel will continue to hold the remaining 75% in its data centre business. The post-money enterprise valuation of Nxtra will stand at approximately $1.2 billion, Airtel said in a statement.

The transaction with Comfort Investment, which is an affiliated entity of CAP V Mauritius Ltd, an investment fund managed and advised by affiliated entities of Carlyle, is subject to necessary regulatory approvals, including clearance from the Competition Commission of India (CCI), the statement added.

“For us, the security and data privacy requirements of our customers are our top priorities, which we have established as a key differentiator for our data centre offerings. Rapid digitization 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,” said Gopal Vittal, managing director & chief executive officer (MD & CEO), India and South Asia, Bharti Airtel.

Carlyle has been investing in Indian companies since 2000, with names such as SBI Life, SBI Card, HDFC, India Infoline, Delhivery and PNB Housing Finance on its books. It recently invested in Piramal Pharma Ltd and SeQuent Scientific Ltd. Carlyle had invested more than $2.5 billion in India as of 31 March, 2020.

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

Headquartered in New Delhi, Airtel's Nxtra offers secure data centre services to leading Indian and global enterprises, hyperscalers, startups, small and medium enterprises (SMEs) and governments. Nxtra’s nation-wide portfolio of 10 large data centres and more than 120 edge data centres provides customers with co-location services, cloud infrastructure, managed hosting, data backup, disaster recovery, and remote infrastructure management.