Data centres draw 40% of institutional capital in the June quarter

New Delhi: Data centres emerged as the second-largest recipient of institutional capital in the June quarter, accounting for 40% of total investments, as rapid AI adoption, cloud expansion and data localisation needs accelerate investor interest in digital infrastructure assets, experts said.

There are 271 data centres in the country as of January, with Mumbai, Hyderabad, Delhi NCR, Bengaluru, and Chennai accounting for nearly 65% of the total, according to Rubix Data Sciences. The rapid increase in data centre footprint more than doubled IT capacity to 387 MW in 2025, from 191 MW a year before.

"We are no longer pricing India data centres like a speculative greenfield bet," said Chan Chakravarty, a Mumbai-based infrastructure fund manager tracking the sector. "We are pricing them closer to a regulated utility, with the upside of an AI demand curve on top. That's a rare combination, and it's why global LPs who were on the fence 18 months ago are now asking us for dedicated India digital infrastructure sleeves."


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Investors are increasingly favouring asset-specific exposure and improved liquidity. Platform and operating company opportunities are also expanding, with entity-level transactions reaching $8.3 billion in 2025.

Current investment pipeline in data centres, spanning projects under development and formally announced, is at around $90 billion, at least six times the $13-15 billion invested between 2020 and 2024. "India's data centre industry has moved past its early growth phase and is now in the middle of a large-scale, AI-driven investment cycle, with the current pipeline significantly outpacing historical investments," said Tushar Bhaskar, president, Rubix Data Sciences. "As demand from hyperscalers, AI workloads, and digital enterprises accelerates, the next test for the industry will be execution."

Amazon Web Services ($35 billion), Microsoft ($17.5 billion), and Google ($15 billion) together account for about $67.5 billion in commitments to India. The government has projected that AI-driven digital infrastructure, including data centres, could catalyse up to $200 billion in investments in the coming years. "Capital allocation is becoming increasingly differentiated across asset classes," said Somy Thomas, executive managing director, capital markets, Cushman & Wakefield.

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"While office continues to attract a broad spectrum of investors owing to its maturity, liquidity and stable income profile, we are also seeing growing interest in the data centre segment as investors seek to capitalise on India's expanding digital infrastructure ecosystem. This diversification of capital is contributing to a deeper and more resilient investment landscape."