Carlyle Group gains 20% stake in India’s Airtel subsidiary Nxtra

By Rahul Vaimal, Associate Editor
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The Carlyle Group
The Carlyle Group Founders, David Rubenstein (L), Bill Conway (M) and Dan D’Aniello (R).

The Carlyle Group, global private equity firm will buy a 25% stake in Nxtra, the data center arm of Indian telecom giant Bharti Airtel Ltd for $235 million.

The transaction carried out through a Carlyle affiliate will give Nxtra Data Ltd an enterprise valuation close to $1.2 billion. Airtel will continue to hold the remaining 75% stake in the firm. The procurement will allow the investment firm to enter a rapidly growing Indian market of digital services. Nxtra, which builds multiple large data centers across India, will utilize the income from the scale-up its infrastructure.

As more businesses in India move towards cloud-based solutions the country is witnessing a  surge in demand for data centers while the demand for digital services such as smartphone entertainment continues to grow from consumers.

Value-added solutions like cloud and entertainment services are expected to be the next revenue segment for established telecom carriers like Airtel, Vodafone-Idea as voice and data rates in India remain the cheapest in the world.

Jio, controlled by billionaire Mukesh Ambani has entered into a tie-up with Microsoft, under which tech giant will build data centers hosted on Microsoft’s Azure cloud platform.