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India’s Data Center Doubling by 2026: What It Means for Infrastructure Investors
Economy, Equities - September 24, 2025

India’s Data Center Doubling by 2026: What It Means for Infrastructure Investors

India’s Data Center Doubling by 2026: What It Means for Infrastructure Investors

The confluence of AI, cloud growth, electrification, and digital services is stressing legacy infrastructure — especially power generation, transmission, and cooling systems. As hyperscalers scale up compute and data center capacity, they demand reliable, low-latency, high-capacity power. But many electricity grids, in India and globally, were not built for the load profiles of AI-supercomputing (high density, variable load, high PUE requirements).
* In 2025, Big Tech (Amazon, Google, Meta, Microsoft) are expected to invest more than US$400 billion in capital expenditure, of which a significant portion goes to data center expansion.
* Globally, McKinsey forecasts that AI workloads will push data center capacity demand 3.5× between 2025 and 2030.
* In the US, data center electricity demand is projected to rise steeply: grids are under strain, and new projects often struggle to get timely grid access or permits.
Hence, infrastructure bottlenecks—especially in power generation, transmission, grid upgrades, cooling, and connectivity—are now a limiting factor on growth, not just compute or chip supply.

India’s data center sector and the “doubling by 2026” projection
That claim—that India’s data center capacity will roughly double by 2026—has grounding in multiple industry projections, though with varying baselines.
* As of 2024, India’s installed data center capacity is often cited around 950 MW (megawatts) for power draw / capacity.
* JLL projects that by end of 2027, India will add 795 MW, rising total to 1,825 MW (i.e. nearly doubling from ~1,025 MW baseline) by then.
* Some forecasts expect India to reach ~1,645 MW by 2026, up from ~835 MW in 2023 (i.e. about a 2× increase) per a market pulse source.
* More aggressive Indian growth forecasts place India’s data center capacity crossing 4,500 MW by 2030, with US$20–25 billion investment in the next 5–6 years.
* India’s data center market is expected to grow to US$24.78 billion by 2033, reflecting strong long-term compounding.
Thus, “doubling by 2026” is a reasonable, moderate assumption (depending on baseline), especially given government push, cloud expansion, digitalization, and data localization rules.

Opportunities in power, transmission, grid modernization, digital infrastructure
1. Onsite / distributed power generation: Because grid access is often delayed by regulatory, permitting or infrastructural constraints, many new data centers are turning to localized power — solar + battery + gas turbines or fuel cells. The 2025 Data Center Power Report (Bloom Energy) indicates that by 2030, about 30% of new sites will rely on onsite power (in “islanded mode”) at least partly. This helps them bypass transmission bottlenecks or grid delays.
2. Transmission and substation upgrades: Even if a data center has generation, it still needs robust, low-loss transmission lines, high voltage substations, and backup paths. Upgrading or building new transmission corridors, high-capacity lines, or “last-mile” power infrastructure is costly and constrained in many jurisdictions.
3. Cooling, thermal management, and water systems: Modern AI compute is high density. Traditional air cooling is increasingly inadequate; many facilities are adopting liquid cooling, immersion cooling, or direct chip cooling. These systems demand more precise infrastructure — chilled water loops, high-capacity pumps, robust plumbing, and redundancy. Industry trend watchers rank liquid cooling and immersion among the top themes shaping data centers in 2025.
4. Grid modernization, smart grid, energy storage: To integrate variable generation (solar, wind), reduce transmission losses, and manage peak loads, grid modernization is essential. Energy storage (batteries, pumped storage) and demand flexibility become key components. Data centers that can flex load or act as grid “demand response” participants may unlock new revenue channels. Indeed, a recent academic study showed that AI-centric HPC data centers can offer grid flexibility at ~50% lower cost than general-purpose HPC centers, by scheduling load intelligently.
5. Digital infrastructure ecosystem: This includes fiber-optic backbone, edge data centers, network backhaul, interconnection, and metro fiber densification. As compute becomes more distributed (edge + national hubs) you need robust connectivity, fiber rings, inter-data center links, and low-latency paths. Each meter of fibre, switching, optical gear, routers, and optical amplifiers is part of “digital infrastructure”.

Risks, constraints, and bottlenecks to watch
While the opportunity is massive, there are constraints:
* Permitting and regulatory delays: Acquiring grid access, environment approvals, land rights, and utility permissions can take years in many jurisdictions.
* Power supply reliability and fuel costs: In some regions, grid-supplied power is intermittent or expensive; local power cost volatility (fuel, gas, backup diesel) can erode margins.
* Water scarcity and cooling constraints: High-density cooling often requires large water usage or chilling facilities; regions with water stress may struggle.
* Capital intensity and upfront time: These projects are capital intensive and have long lead times; firms need strong balance sheets and patient capital.
* Technology risk: Advances in compute efficiency, cooling methods, or chip architectures could reduce power or infrastructure demands, undermining current investments.
* Carbon intensity / ESG constraints: As data centers scale, carbon footprints and regulatory pressure for clean energy sourcing increase. Some projects may be penalized or require carbon offsets.

Why this matters to an investor or asset allocator
Understanding this bottleneck-driven opportunity helps investors spot second- and third-order winners, not just the front-line cloud providers or chip makers. Some potential beneficiary classes:
* Developers/builders of data center campuses who own land + infrastructure rights
* Power generation / distributed energy / microgrid firms
* Transmission & distribution companies doing grid upgrades or switching
* Cooling / HVAC / immersion engineering firms
* Fibre, interconnect, backbone and metro networking providers
* Energy storage and battery systems manufacturers
* REITs / infrastructure funds that specialize in digital infrastructure (if available in your region)
In screening or valuing, investors should look at capital intensity, power cost per watt, PUE (Power Usage Effectiveness), availability of onsite generation, and connectivity redundancy.

Conclusion
The AI era is not simply about chips and algorithms — it is about the colossal infrastructure needed to power them. With global data-center capacity set to triple between 2025 and 2030 and India’s own market projected to double by 2026, the bottleneck lies squarely in energy, transmission, cooling, and digital connectivity. For investors, this presents both a challenge and an opportunity. Those who understand metrics like capex-to-sales ratios, PUE efficiency, and gross margins in memory supply chains can separate durable compounders from speculative plays. The investment frontier is expanding: not just semiconductors and cloud providers, but also power producers, REITs, InvITs, grid-modernization firms, and digital infrastructure developers are poised to capture the upside of this structural supercycle. Prudent allocation today means building resilience into portfolios while riding the wave of AI-driven demand tomorrow.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The image added is for representation purposes only

Investment Strategies in an Era of Tariffs: India’s Emerging Role in Global Trade Networks

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STL Networks’ Shares Jump on ₹360 Crore PowerGrid Teleservices Contract
Equities, Markets - September 17, 2025

STL Networks’ Shares Jump on ₹360 Crore PowerGrid Teleservices Contract

STL Networks’ Shares Jump on ₹360 Crore PowerGrid Teleservices Contract

STL Networks’ stock witnessed a sharp surge in trading after the company announced that it had secured a significant ₹360 crore contract from PowerGrid Teleservices for building a Tier III data center. The development has not only boosted investor sentiment but also highlighted STL Networks’ growing role in India’s expanding digital infrastructure ecosystem.

Major boost from PowerGrid Teleservices contract
The ₹360 crore deal involves designing, building, and maintaining a Tier III data center for PowerGrid Teleservices, a subsidiary of Power Grid Corporation of India Limited (PGCIL). Tier III facilities are known for their high levels of reliability, redundancy, and uptime guarantees, making them critical for enterprises and government organizations. For STL Networks, winning this project positions it as a credible player in the high-value, capital-intensive data center business. This segment has been witnessing rising demand due to cloud adoption, digital transformation, and India’s growing emphasis on self-reliant digital infrastructure.

Stock market response
Following the announcement, STL Networks’ shares surged significantly, closing the day with strong gains on the exchanges. Market participants interpreted the deal as a sign of the company’s operational strength, technological expertise, and ability to secure large contracts. Trading volumes also spiked, indicating heightened investor interest.
Analysts noted that the contract will add a substantial order backlog to STL Networks, providing revenue visibility in the near term. The market reaction reflects confidence that the company’s top line and profitability will benefit from the successful execution of the project.

Data center market opportunity in India
India’s data center industry is growing rapidly, driven by regulations, digitization, and rising cloud usage. Reports suggest capacity may more than double in five years. With government focus on data localization and 5G rollout, demand for advanced infrastructure is rising. STL Networks’ new contract fits these trends, allowing it to tap the need for reliable and secure facilities.

Strengthening STL Networks’ position
While the company is already known for its optical networking and digital solutions, entering large-scale data center projects provides it with a diversified revenue stream. By partnering with a strong client like PowerGrid Teleservices, STL Networks not only gains financial traction but also builds a track record in executing critical infrastructure projects. This credibility could open doors for future contracts with other government agencies, telecom operators, and global cloud service providers.

Financial implications and outlook
From a financial perspective, the ₹360 crore deal is expected to contribute positively to STL Networks’ order book and earnings. Data center projects typically involve multi-year execution, which ensures steady cash flows and predictable revenue recognition.
Brokerage firms have already highlighted that the contract will improve the company’s visibility and could drive margin expansion if executed efficiently. Moreover, with India’s data center market projected to grow at double-digit rates, STL Networks has an opportunity to capitalize on this momentum.

PowerGrid Teleservices’ strategic move
On the other side, PowerGrid Teleservices’ decision to invest in a Tier III data center reflects its broader strategy to diversify operations and support India’s digital backbone. By building state-of-the-art facilities, the company can cater to mission-critical needs of enterprises, government organizations, and telecom networks. The partnership with STL Networks ensures that the project will be delivered by a firm with expertise in designing and deploying advanced digital infrastructure. This collaboration strengthens both companies’ positions in the ecosystem.

Investor sentiment and sectoral tailwinds
Market experts believe that the stock’s rally is not just a short-term reaction but also a recognition of the company’s long-term potential in digital infrastructure. The broader sector tailwinds—government support, rising digital consumption, and foreign investment inflows into Indian data centers—create a favorable backdrop for STL Networks’ expansion. Investors are closely watching whether the company can replicate this success with additional contract wins in the coming quarters.

Possible Pitfalls
While the outlook appears promising, there are challenges. Data center projects are capital-intensive and require strict adherence to timelines and quality standards. Any delay or cost overrun could affect margins. Additionally, competition from global data center operators entering India poses a risk. However, STL Networks’ strong technical capabilities, combined with the credibility of working with PowerGrid Teleservices, position it well to overcome such hurdles.

Conclusion
STL Networks’ stock rally following the ₹360 crore Tier III data center contract with PowerGrid Teleservices marks a significant milestone for the company. It strengthens its role in India’s digital infrastructure growth story while providing financial stability and opening doors to future opportunities. As India accelerates its data-driven transformation, STL Networks stands poised to benefit from rising demand and evolving market dynamics.

 

 

 

 

 

 

 

 

 

 

 

 

 

The image added is for representation purposes only

Godfrey Phillips India Outshines Peers Amid Sector-Wide FMCG Upswing

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Technical Glitch Shields China from New Tariffs
Economy, Market News - April 15, 2025

Technical Glitch Shields China from New Tariffs

Technical Glitch Shields China from New Tariffs

 

Introduction: A Glitch with Global Consequences

In a remarkable twist of geopolitical and economic fate, a newly surfaced report has confirmed that China was inadvertently spared from a fresh wave of US tariffs due to a 10-hour-long technical glitch that disabled tariff enforcement systems at major American ports. The disruption, which occurred during a critical implementation window, effectively delayed the application of tariff adjustments that had been publicly announced just days prior. The incident, while brief, demonstrates the immense influence of digital infrastructure on global trade and highlights the fragility of economic enforcement mechanisms in the modern era.

The Incident: What Happened at the Ports?

The International Trade Systems Review Board (ITSRB) report stated that the glitch occurred across key US customs and port-of-entry software systems from 2:00 AM to 12:00 PM EST when the new tariffs are set to take effect. During this timeframe, customs agents could not update tariff codes or enforce rate changes on incoming cargo, particularly shipments from China. Consequently, several large shipments entered the country at previous duty rates, circumventing the intended increase in import costs.

The Policy Backdrop: Trump’s Tariff Push

The now-missed tariffs were part of a broader economic policy by former President Donald Trump, who had recently reintroduced aggressive tariff measures on goods from various nations, excluding China from exemptions. The move aimed to pressure Beijing amid ongoing tensions regarding trade imbalances, intellectual property theft, and supply chain dependencies. This latest set of tariffs was expected to cost Chinese exporters an estimated $500 million in added duties per week. However, the glitch has resulted in a delay that could cost the US Treasury millions in unrealised revenues and reduce the intended economic pressure on China.

China’s Silent Windfall

Despite the Biden administration’s attempt to distance itself from the more extreme elements of Trump-era protectionism, several tariffs remained in place and were recently intensified. While there has been no official comment from the Chinese government, trade analysts argue that the glitch inadvertently gave China a brief but meaningful financial reprieve. For Chinese exporters, this window allowed high-volume goods such as electronics, textiles, and industrial components to bypass newly heightened import fees, albeit temporarily increasing their competitiveness in the US market.

US Response: Acknowledgment but No Accountability

US Customs and Border Protection (CBP) acknowledged the disruption in response to growing scrutiny. Still, they labelled it a “technical irregularity,” refusing to speculate whether it resulted from system overload, human error, or a potential cyber incident. While an internal investigation is ongoing, CBP confirmed that the impacted systems were fully restored by mid-afternoon, and all pending tariff updates were retroactively applied. However, the government has clarified that retroactive enforcement of the missed tariffs is unlikely due to the complexity and legality surrounding such adjustments.

Implications for Future Trade Enforcement

This event has raised concerns among government officials and trade specialists about the resilience and dependability of the United States’ digital commerce systems. Officials are advocating for a thorough examination of port cybersecurity measures and system redundancy strategies to mitigate the risk of future disruptions. Moreover, the glitch has ignited a broader conversation about the increasing reliance on automated enforcement systems in global commerce and the potential national security risks posed by such vulnerabilities.

Market Impact and Stakeholder Reactions

The temporary exemption has also rippled through financial markets. Shares of US-based logistics and import-heavy retailers briefly surged on the news, while domestic manufacturing stocks faced slight pressure due to the continued presence of cheaper Chinese alternatives. Economists suggest that while the glitch’s long-term impact on macroeconomic indicators may be minimal, it is a poignant reminder of how real-time digital systems now wield geopolitical significance.

Conclusion: A Warning from the Wires
The 10-hour technical glitch at US ports may seem like a fleeting digital hiccup, but its implications echo loudly across international trade and policy enforcement. In an age where economic strategy is as reliant on lines of code as on lines of legislation, this incident serves as both a warning and a wake-up call. As the US continues to navigate a complicated trade relationship with China, ensuring that its digital enforcement tools are as resilient as its diplomacy is now more critical than ever.

 

 

 

 

 

 

 

 

The image added is for representation purposes only

ECB Closes the Door: What It Means for Asset Management M&A

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