Large capacity additions in data centres by multinational corporations in India have led to a threefold jump in demand for ABB India’s electronic products during the calendar year 2024.
According to ABB India, data centre orders increased over three times year-on-year in calendar year 2024 versus calendar year 2023 and has joined the category of high-value orders. “This industry is surprising us. We did not expect the growth to be so high a year before. I think it is only going to accelerate. This will remain a robust segment for us going forward,” Sanjeev Sharma, CEO and Managing Director of ABB India, said during his visit to the Maneja plant in Vadodara on Tuesday evening.
“During the calendar year 2024, about 14 per cent of our orders came from data centres,” Sharma said. The company’s total orders for the calendar year 2024 stood at ₹13,079 crore. The official said ABB India supplies medium- and low-voltage switchgear, UPS, and other items to secure the power supply to the data centres in India. The company also supplies drives and motors to Original Equipment Manufacturers (OEMs), which set up HVAC (heating, ventilating, and air conditioning) systems for these data centres.
The company has been eyeing the huge investments being promised for setting up data centres in India. ICRA expects India’s data centre operational capacity to more than double to 2,000-2,100 MW by FY2027 from 950 MW in FY2024, involving an investment of ₹50,000-55,000 crore. The data centre capacity in India is dominated by a few players like NTT Global Data Centers, STT Global Data Centers, CtrlS Data Centres, Sify Technologies and Nxtra Data Limited, which had a share of 85 per cent in the operational capacity as of March 2024. However, considering the country’s strong demand for data centres, many new developers like Yotta, Digital Connexion, Lumina CloudInfra, CapitaLand, Digital Edge, etc., have entered the industry with massive investments.
According to a market update from CBRE Research India, increased internet penetration, policy enablers, rising data consumption and Artificial Intelligence adoption were driving the data centre market in India. Mumbai, Chennai, Delhi-NCR, and Bengaluru are the established tier-I data centre markets in India. These cities account for about 90 per cent of the country’s data centre stock with Mumbai constituting 49 per cent of India’s data centre stock alone. Mumbai and Chennai continue to be the most prominent data centre markets, accounting for more than half of the total stock. The presence of multiple cable landing stations, inclusive government initiatives, and well-rooted finance industries have established the cities as the top destination for BFSI, media, cloud, hyperscale, and OTT companies to locate their data centre operations.
In an earnings call for the October-December 2024 quarter held on Tuesday by ABB India, Sharma said, “This is the 75th year of ABB in India, and we have never had it better. So we continue to be positive, and we will continue to engage and expand in this country.”