Bharti Airtel will hold around 75% of Nxtra, while Carlyle will hold a stake of 25% at $235 million

Nxtra is a wholly-owned subsidiary of Bharti Airtel. And, in a recent development, The Carlyle Group on Wednesday have agreed to invest $235 million in Nxtra. With this deal, the enterprise value of Nxtra becomes $1.2 billion. Thus, Carlyle will hold a stake of about 25% in the business upon completion of the transaction. Airtel will continue to hold the remaining stake of around 75%. The transaction is subject to the necessary regulatory approvals. This includes approval from the Competition Commission of India, Airtel said in a statement.

About Nxtra

Headquartered in New Delhi, Nxtra from Airtel offers secure data centre services to leading Indian and global enterprises, hyperscalers, start-ups, SMEs and governments. Nxtra is building multiple large data centres across the country to capture the significant growth opportunities in India. Last year, the company commissioned a state of the art data centre in Pune. It was also building more centres across Chennai, Mumbai and Kolkata. It will use the proceeds from this transaction to continue scaling up its infrastructure and offerings across the country.

Commenting on the deal, Gopal Vittal, MD and CEO, Airtel, India and South Asia 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 also 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.

Nxtra has a nation-wide portfolio of 10 large data centres and more than 120 edge data centres. It provides customers with co-location services, cloud infrastructure, managed hosting, data backup, disaster recovery, and remote infrastructure management.

About the deal

Private equity player Carlyle has channelled the investment through the entity- Comfort Investments II. This is Carlyle's third recent investment in India, after purchasing stakes in Sequent Scientific and Piramal Pharma.

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.

Airtel is the largest player in India’s enterprise connectivity segment and serves over 2,500 large businesses and over one million medium and small businesses.

Commenting on the deal, Greg Zeluck, Co-Head, Carlyle Asia Partners advisory team said:

Airtel is a high-quality partner in India with whom Carlyle executives have built a strong and constructive relationship with over many years. Airtel’s nation-wide network and strong governance coupled with Carlyle’s data centre experience and operational capabilities creates a compelling partnership that will help Nxtra to capture growing demand as data usage continues to surge.

Carlyle also has prior experience in data centre ownership through investments in Coresite in the US and Itconic in Spain. The firm has in-depth local knowledge within India has been investing in the market since 2000, with notable investments including SBI Life, SBI Card, HDFC, India Infoline, Delhivery and PNB Housing Finance. Carlyle had invested more than $2.5 billion in India as of March 31, 2020.

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