Lightstorm eyes IPO, AI-led growth on Cloud and data centre connectivity

I-Squared Capital, NIIF-backed fibre and connectivity provider set to invest $100-200 mn in network for AI hyper growth

Lightstorm, a Singapore-based privately held fiber and cloud connectivity provider in India, is planning to expand across the Asia-Pacific market while preparing for major infrastructure investments for tapping into artificial intelligence (AI). 

 

The company that builds and contracts out back-end connectivity to hyperscalers and data centers, is evaluating an initial public offer (IPO) in the near term, Cofounder and Chief Executive Officer Amajit Gupta said in an exclusive interaction.

 

“We have the option of raising money from capital markets, including equity markets, given the health of our financials, the growth picture and the asset we have built. We could potentially go public. So these options are open to us,” he said in an interaction with Business Standard. "I can confirm that discussion is on."

 

The motivation for a potential listing would be value discovery and investor diversification, instead of just a need for capital. The company, backed by infrastructure-focused private equity firm I-Squared Capital and having got recent funding from the National Investment and Infrastructure Fund (NIIF), is profitable at the operating cash flow level and carries a conservative debt-to-equity ratio. "The incentive really is to discover value, be a good shepherd of returning capital for capital which has been invested in us for five, seven years," Gupta said.

 

Having built international landing stations in Delhi, Mumbai and Chennai, Lightstorm currently operates a network spanning 120 data centres across seven countries — India, the United States, Japan, Australia, Guam, Singapore, and some Southeast Asian markets — and also provides transit connectivity for internet traffic from Nepal and Bangladesh into India. Its fiber footprint stands at roughly 50,000 kilometres (km), of which 30,000 km are within India and 21,000 km run across the subsea Pacific. 

 

“We are in the process of building out landing stations, both in the East coast and West coast of India, based on the new submarine cables which are expected to land in India over the next two to three years. The new AI implementations in India would give us an opportunity to unlock a whole new network, for AI to be actually consumed by enterprises as well as cloud companies. That’s the backbone of our next five years’ growth,” he said. 

 

He noted that the growth was inevitable since compute and  graphics processing unit (GPU) capacity was scaling at 40 to 50 per cent annually, much faster than the ability to connect those compute clusters, in turn creating a critical bottleneck which needed to be addressed. 

 

“We are investing a few hundred million dollars to build a network over the next 24 months, which is a combination of fiber plus some dramatically new electronics, and a lot of software smarts based on the foundation that we all already have,” he said. They will build a fundamentally new kind of network to support AI workloads rather than simply retrofitting existing cloud infrastructure, Gupta added.  

 

Taking a conservative growth path for the next five years based on the company’s current 25 to 30 per cent year-on-year growth, Lightstorm may not need additional equity. However, Gupta said that funding will be required to fuel its ambitions to create AI infrastructure which will require a more aggressive approach. 

 

With disruptions in West Asia affecting the traditional India-to-Europe routing via the Red Sea, Gupta said there are early signs of traffic being redirected eastward — through India and Southeast Asia. "We already hear chatter in the middle of a few conversations, which is a great sign for markets like India and Southeast Asia," he said. The company sees geopolitical realignments in global internet traffic routing as a potential tailwind. 

 

The company’s existing subsea asset connects the US, Japan, Australia, and Guam, and it is now working toward connecting India's East Coast to Malaysia, Singapore, and eventually from Singapore to Guam. 

 

Gupta also flagged India's submarine cable landing infrastructure as vulnerable as it was concentrated within just a few kilometres of shoreline at Chennai and Mumbai, creating a national-level risk. The company intends to look at alternate locations, in the attempt to diversify from the concentrated locations. Lightstorm has looked at sites in Gujarat, the East Coast near Andhra Pradesh, Odisha, and near Kolkata, for its upcoming landing stations and had acquired requisite licenses and gateway infrastructure. “We’re waiting for submarine cable systems to be announced and commissioned.”  

 

Submarine cable systems are typically structured as partnerships rather than sole ownership, most having a hyperscaler on board that serve a dual role as both co-investors and primary traffic generators on such systems.