Kotak Data Centre Fund, managed by Kotak Alternate Asset Managers, which marked its first close in February, made an additional investment in a subsidiary of Sify Technologies to back the expansion of data centres in India.
Sify Infinit Spaces, a wholly-owned subsidiary of Sify Technologies, received an equity commitment of Rs 600 crore from Kotak Data Centre Fund. This investment is in addition to the Rs 1,000 crore invested from Kotak Special Situations Fund in November 2021. With this transaction, Kotakalts’ total investment in the company has increased to Rs 1,600 crore.
Like the previous transaction, this funding was also made in the form of compulsorily convertible debentures, which will be converted into equity based on the operational performance of the company over a specified reference period.
The funds would be used to expand Sify Infinit Spaces’ data centre capacity across India and invest in renewable energy.
“This partnership gives us the needful equity to scale up our data centre footprint and realize our opportunities faster. Our intent is to build capacity in sync with customer demand, in the most modular design and by deploying the latest and most cost-effective technologies,” said Vijay Kumar, executive director and group chief finance officer at Sify.
While Sify did disclose more details, the previous funding announcement specified that the funds would be used to invest in Sify’ plan to develop new data centres in Mumbai, Noida, Chennai, Bangalore and Hyderabad and for investment in renewable energy requirements for operational and new data centres for up to Rs 4,000 crore.
“Data centres are at the core of the country’s Digital India ambition, and we believe that with vibrant entrepreneurship in the digital space, rich media consumption by an exploding well-connected population and increasing requirements for local storage of data, India’s Data Centre sector is a long-term secular opportunity,” Srini Sriniwasan, Managing Director, Kotak Alternate Asset Managers Limited said.
In February, Kotakalts, the alternative asset management and investment advisory arm of Kotak Group, marked the first close of the $800-million Kotak Data Centre fund at $590 million. The investment vehicle will invest in building data centre capacity, in a bid to support data-backed digital economy, enterprise cloud, 5G and IoT (internet of things). The fund is domiciled in Gujarat’s GIFT City.
According to real estate research platform Colliers’ report, India’s data centre stock is likely to double in the next couple of years to about 20 million square feet on the back of accelerated adoption of smart devices, e-commerce and cloud services.
Set up in 2005, the Kotak Mahindra Group last month announced that it shall combine its alternate fund management and investment advisory businesses into an entity with $18 billion under management, which will be rechristened as Kotak Alternate Asset Managers Limited, erstwhile Kotak Investment Advisors Limited. The entity, during its launch, was expected to include $8.9 billion in alternate investment funds and the advisory business with $9.1 billion under management. The company is not looking to raise any external funds, the managing director had in August.
