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Carlyle picks 25% stake, investing $235 mn, in Airtel's Data Center business Nxtra

Nxtra from Airtel offers secure data center services to Indian and global enterprises, hyperscalers, start-ups, SMEs, and governments.

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VoicenData Bureau
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Nxtra from Airtel offers secure data center services to Indian and global enterprises, hyperscalers, start-ups, SMEs, and governments.

The last couple of weeks, media houses were flooded back-to-back with investment news from Reliance Group and Jio Platforms. Well! Now for a change, India’s largest integrated telecommunications operator, Bharti Airtel, has a piece of investment news to share.

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Airtel and Comfort Investments II, an affiliated entity of CAP V Mauritius Limited - an investment fund managed and advised by affiliated entities of NASDAQ-listed Carlyle Group -  have reached an agreement under which Comfort Investments II will invest $235 million in Nxtra Data Limited (Nxtra), a wholly-owned subsidiary of Airtel engaged in the data centre business.

The New Delhi-headquartered Nxtra from Airtel offers secure data center services to Indian and global enterprises, hyperscalers, start-ups, SMEs and governments.

The post-money enterprise valuation of Nxtra is approximately US$1.2 billion and Carlyle will hold a stake of approximately 25% in the business upon completion of the transaction, with Airtel continuing to hold the remaining stake of approximately 75%.

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Nxtra intends to use the proceeds from this transaction to continue scaling up its infrastructure and offerings across the country.

The transaction is subject to the necessary regulatory approvals, including approval from the Competition Commission of India.

According to Gopal Vittal, MD & CEO (India and South Asia), Bharti Airtel, India is witnessing a considerable surge in demand for secure data centres as businesses undertake digital transformation and consumer demand for digital services continues to increase. The expansion of hyperscalers across the region following the government’s directive on data localization is propelling a lot of this demand, with other market drivers including the growth in user data and increase in cloud penetration.

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Commenting further, Gopal Vittal, said, “At Airtel, we have built a robust data centre portfolio that is future-ready and scalable. 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."

Bullish on India, Carlyle has notably invested more than US$2.5 billion in several firms as of March 31, 2020.

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 centres in India. We look forward to collaborating with Airtel to unlock the full potential of Nxtra.”

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