Today on The CapTable: How Adani and Reliance have emerged as data centre kingmakers
Reliance and Adani Group have emerged as preferred partners for Big Tech companies looking to set up their own data centres in the country. With their considerable heft and connections, these conglomerates are now an existential threat to existing data centre operators.
In the past two years, Big Tech has forged significant partnerships with two of India's largest conglomerates to construct massive data centres nationwide. Microsoft, Google, and Meta have teamed up with the Adani Group and Reliance Industries, leveraging their expertise to secure necessary permits and build these facilities.
Microsoft, which faced hurdles in land and environmental clearances, turned to the Adani Group to navigate these challenges in Maharashtra and Telangana. The company awarded contracts for data centre construction in Hyderabad and Pune to Adani Enterprises' joint venture, AdaniConneX. This partnership also extends to building substations and transmission lines in Hyderabad.
AdaniConneX’s clientele includes Google, providing data centre capacity in Noida. In a recent investor presentation, the conglomerate revealed an order pipeline of 215MW. The rush by Big Tech to establish mega data facilities in India has positioned Indian conglomerates like Adani favourably, thanks to their substantial balance sheets and experience in large-scale projects.
A senior executive noted that companies like Microsoft lack the influence in governmental decision-making that Adani holds. Reliance Industries Limited (RIL) entered the data centre arena last year, with its subsidiary Jio partnering with Brookfield and Digital Realty for a facility in Chennai. Meta, an investor in Jio Platforms, recently closed a deal with Digital Connexion for this facility.
The involvement of Adani Group and RIL in securing major contracts from Big Tech has unsettled existing data centre operators and private equity-backed global players like Colt, CapitaLand, BDX, and Lumina. These operators, already struggling to attract Big Tech and large Indian enterprises, now face intensified competition. With India's largest conglomerates entering the fray, what challenges will these smaller operators face next? Find out in our today's The CapTable story.
