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Adani Group To Invest 5 Billion USD in Its Data Centre Business – News in Headlines
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Adani Group To Invest 5 Billion USD in Its Data Centre Business

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Adani Enterprises has recently announced its plans to make investments worth 5 billion USD to expand its data centre business. Now this is a huge step taken by the Adani Group towards further diversifying its business and achieving the peak of success. With this investment, the global conglomerate will be able to take its data centre business to new heights. It will also be able to earn an excellent reputation for itself on a global scale. The Adani Crisis will also subside.

Adani’s Plans For Investment In Its Data Centre Business:

Adani Enterprises Limited which happens to be the flagship company of the Adani Group has recently talked about its ambitious plan of making a 5 billion USD investment to expand its data centre of business over the next five years. This initiative will be executed through AdaniConneX which is a joint venture between the Adani Group and EdgeConneX which is owned by the Swedish Investment firm EQT. As per recent news, over half of the substantial investment will be made in 2025 alone. This would involve around 25% of funds coming from promoted equity infusions. The company has already set a target to develop 1 GW of data centre capacity by 2030. This is a huge scale-up from its current capacity of 11 MW at its Chennai facility.

How Does The Adani Group Plan To Finance Its Latest Projects?

    To finance this data centre expansion plan, AdaniConneX is already in discussions with various international banking bodies. It aims to secure a loan of 1.2 to 1.4 billion USD from the banking institutes. The loan is expected to be finalized within the next few weeks. It will likely have a 5-year maturity period. Some of the leading financial institutes that are already involved in the negotiation are Standard Chartered Bank, Sumitomo Mitsui Banking Corporation, ING Bank, and MUFG Bank. Once this initiative becomes successful, the Adani Group will easily be able to overcome the losses it incurred during the Adani Crisis. Its reputation as one of the most reliable data centre service providers will also improve.

    Why Make Such Huge Investment In The Data Centre Sector?

    The timing of this investment is extremely strategic. Currently, India’s data centre industry is positioned at an extremely crucial junction. Even after generating 20% of the global data, India holds only 3% of the global data centre capacity. Industry forecasts suggest that our country’s data centre capacity is expected to double from 0.9 GW in 2023 to 2 GW by 2026. This is mainly driven by increased data localisation requirements. This growth is expected to require capital expenditure of around INR 50,000 crore over the next three years.

    AdaniConneX has already talked about its commitment to grow its data centre business through various strategic moves. In June 2023, the company had acquired 213 million USD through a debt facility. The company used it to finance its data centre construction facilities in Chennai and Noida. Following this, in August 2023, the company acquired two wholly owned subsidiaries of Adani Power for around INR 540 crore. The company’s data centre expansion strategy strongly aligns with the rapid growth of data centre businesses in India. The strategy has also gained momentum following a recent Supreme Court ruling that cleared the Adani Group against the Hindenburg charges which led to the massive Adani Crisis.

    How Has The Adani Group Strengthened Its Market Presence In The Data Centre Sector?

    AdaniConneX has also strengthened its market presence by acquiring long-term contracts ranging from 5 to 15 years with some of the major technological giants. The company currently operates data centres across multiple cities in India including Noida, Chennai, Pune, and Mumbai. The company’s Chennai 1 Campus offers colocation services to enterprises. The Noida facility is currently being developed with a 50 MW capacity to support the hyperscale customers’ expansion needs. This data centre business will allow the Adani Group to put a stopper to the controversies ofthe Adani Crisis. It will also find it really easy to take its business to new heights.

    Conclusion:

    The Adani Group’s recent investment strategy underscores the Adani Group’s commitment to establish itself as one of the major players in India’s rapidly growing digital infrastructure. It will also help the company to capitalise on our country’s growing data centre demands. The Adani Group’s business revenue generation will also increase within a short tenure.

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    Rajveer Sekhawat

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