Bharti Airtel gains as Carlyle group to buy 25% stake in data centre biz

Bharti Airtel rose 0.96% to Rs 565 after the company said that US-based Carlyle Group will invest $235 million in its data centre business Nxtra Data (Nxtra) for a 25% stake.

The investment will be made by Comfort Investments II, an affiliated entity of CAP V Mauritius, an investment fund managed and advised by affiliated entities of The Carlyle Group.

In a joint statement, Bharti Airtel and The Carlyle Group said that the post-money enterprise valuation of Nxtra is approximately $1.2 billion. Post the investment, which is still subject to regulatory approval, Bharti Airtel will continue to hold a 75% stake in the company. Nxtra has 10 large data centres and over 120 edge data centres.

The Delhi-based Nxtra from Airtel offers secure data centre services to leading Indian and global enterprises, start-ups, SMEs, and governments, the company said in the statement.

"Rapid digitization has 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," said Gopal Vittal, MD & CEO (India and South Asia), Bharti Airtel. Gopal Vittal added that the partnership with Carlyle Group is particularly exciting given the group's experience in the industry.

"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. We look forward to collaborating with Airtel to unlock the full potential of Nxtra," said Neeraj Bharadwaj, managing director of the Carlyle Asia Partners advisory team.

The Carlyle Group is a global investment firm with deep industry expertise that deploys private capital across four business segments: corporate private equity, real assets, global credit and investment solutions. It has $217 billion of assets under management as of 31 March 2020.

Bharti Airtel is a leading global telecommunications company with operations in 18 countries across Asia and Africa.

The telecom major reported a consolidated net loss of Rs 5327 crore in Q4 March 2020 (Q4 FY20) as against net profit of Rs 107.20 crore in Q4 March 2019 (Q4 FY19). The exceptional charge of Rs 7004 crore during Q4 March 2020 comprises of a charge on account of reassessment of regulatory cost. Net sales jumped 15.1% to Rs 23,722.70 crore during the period under review.

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