KKR, Singtel, Tata plan to sell data centre company; seek at least $5 billion in sale: Report

Private equity firm KKR, Singtel and Tata Group, the key shareholders of STT Global Data Centres India (STT GDC India), are planning to sell their local operations to unlock value, in what could be one of the largest data centre transactions in the country.

According to a report in The Economic Times, the proposed multi-billion-dollar sale comes amid a global rush to expand data centre capacity, driven by hyperscalers and infrastructure providers. STT GDC India operates 34 data centres across 10 centres, with a total capacity of 613 MW.

The shareholders have appointed advisers to explore a sale to global players operating in or considering an entry into India, large domestic conglomerates and financial investors, including infrastructure-focused funds and private equity firms.

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The sale is part of a dual-track process to rebalance capital requirements and help the Tata Group streamline its data centre plans, as per the report. The shareholders had also begun evaluating an Indian initial public offering (IPO) around July, with advisers appointed for the process. The business was then valued at $6 billion to $7 billion.

STT GDC is seeking at least $5 billion in a sale, slightly below its potential IPO valuation, sources said. Data centres in the Asia-Pacific region have been valued at 18 to 20 times contracted earnings before interest, taxes, depreciation and amortisation (EBITDA), while Blackstone and CPPIB’s $16 billion acquisition of Australia’s AirTrunk in September 2024 valued the company at 22 to 23 times contracted EBITDA.

KKR and Singtel in February announced a $5.2 billion cash buyout to take full control of ST Telemedia Global Data Centres, at an implied enterprise value of $10.2 billion. KKR currently owns 75 per cent of STT GDC, with Singtel holding the remainder.

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Their Indian business is a 74:26 joint venture between STT Telemedia and Tata Communications. The Tata Group has separately decided to pursue its data centre plans through an independent platform involving TPG and group flagship TCS.

STT entered India in 2016 by acquiring a controlling 74 per cent stake in Tata Communications’ data centre business, while Tata Communications retained 26 per cent. The business was then valued at Rs 3,140 crore and included 14 data centres.

Tata Communications invested another Rs 319.4 crore in STT during FY26 to retain its stake. In September 2024, it announced a Rs 26,000-crore investment commitment to add 550 MW of capacity over five to six years.