US equity firm to buy 25% of Bharti Airtel’s Nxtra Data
US-based private equity firm Carlyle Group will acquire a 25 percent stake in Airtel's wholly-owned subsidiary data centre business, Nxtra Data based in New Delhi, for $235 million (Rs 1,780 crore), the company said today.
The deal, reflective of the huge attraction of India's telecom sector, will peg the enterprise valuation of Nxtra at $1.2 billion, which is over Rs 9,084 crore.
"Bharti Airtel and Comfort Investments II, an affiliated entity of CAP V Mauritius Limited -- an investment fund managed and advised by affiliated entities of the Carlyle Group -- today announced an agreement under which Comfort Investments II will invest $235 million in Nxtra Data Limited, a wholly owned subsidiary of Airtel engaged in the data centre business," a Bharti Airtel statement said.
The deal needs to be approved by the Competition Commission of India.
Nxtra offers data centre services to leading Indian and global enterprises, start-ups, small and medium businesses and governments.
The statement said India is witnessing a considerable surge in demand for secure data centres as businesses undertake digital transformation and the demand for digital services continues to increase.
"The expansion of hyperscalers across the region following the government's directive on data localisation is propelling a lot of this demand, with other market drivers including the growth in user data and increase in cloud penetration," it said.
Neeraj Bharadwaj, managing director of the Carlyle Asia Partners advisory team, said in a statement 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."
Meanwhile, Carlyle Group will purchase a 20 percent stake in India's leading Piramal Enterprises' pharmaceutical unit for around $490 million.
Carlyle has invested more than $2.5 billion in India as of March 31, 2020, the statement added.
In April, Facebook said it would invest Rs 43,574 crore into Jio Platforms, a subsidiary of Mukesh Ambani-led Reliance Industries for a 9.99 percent stake in India's largest FDI in tech sector.
Earlier this month, Jio Platforms said it would raise Rs 11,367 crore by selling another 2.32 percent to Saudi Arabia's sovereign wealth fund Public Investment Fund (PIF).
This would be the tenth investor picking up a stake in the Reliance Industries' (RIL) telecom and digital business in eight weeks.