1,123 MW
India DC capacity, H1 2025
Confidential — Investor Review
Western India's Tier-II colocation facility,
built rack by rack.
A 30-server enterprise data center going live in Surat, Gujarat — closing a 170–220 server supply gap in a market growing 35–40% a year, with a clean path to 150+ servers by Year 5.
₹2 Cr
Total investment
₹12 Cr
Pre-launch valuation
₹3 Cr
Funding sought
RACK-01 // OCCUPANCY RAMP
● LIVE
Y1 target: 40–60%
Y2 target: 60–90%
01 / Market
India's data center build-out has a Surat-shaped hole in it.
Capacity is expanding nationally at record pace, but Western India's second-tier cities remain almost entirely dependent on Mumbai and Bangalore for colocation — at 60–90ms of latency.
387 MW
Added in 2025 alone — 2x YoY
₹8,000 Cr
Market size by 2026 (~US$1B)
35–40%
CAGR, 2025–2030
Why Surat, specifically
01
Rising tech hub
5,000+ IT companies and a growing fintech sector with no local colocation to serve them.
02
Manufacturing base
60,000+ SMEs that need IT infrastructure but have no reason to host it in another state.
03
Lower real estate cost
30–40% cheaper than Mumbai or Bangalore, direct to CAPEX efficiency.
04
Policy tailwind
Gujarat IT Policy 2022–27 puts real capital and tariff incentives behind new builds.
Surat demand by segment
| Segment | Monthly demand | Growth |
|---|---|---|
| E-commerce | 50–60 servers | 25% |
| Financial services | 30–40 servers | 20% |
| Manufacturing SMEs | 40–50 servers | 15% |
| Education | 20–30 servers | 10% |
| Startups & tech | 30–40 servers | 30% |
TAM ~250–300 servers by 2029 · current supply ~80 · gap 170–220 servers
02 / The Build
Where the ₹1.5 Cr in CAPEX actually goes.
Seven line items, from the concrete to the racks — sized for a 30-server Phase 1 with room to scale to 75, then 150+.
Server hardware & racks
30 rack servers, SAN storage, core switching, firewall, load balancers
₹1.0–1.2 Cr
Power & UPS infrastructure
125 kVA DG, 30 kVA online UPS, distribution & lightning protection
₹24.0 L
Monitoring, security & mgmt
CCTV, biometric access, NOC tooling, disaster recovery, backups
₹7.0–7.5 L
Cooling & HVAC
Hot/cold aisle containment, N+1 CRAC, SCADA temp monitoring
₹8.4 L
Testing & commissioning
Load testing, ISO 27001, staff training, documentation
₹5.5 L
Network & connectivity
Primary + redundant 1 Gbps links, DDoS protection, Nagios/Grafana
₹5.5 L
Total CAPEX, Phase 1
₹1.50–1.72 Cr
03 / Revenue Engine
Four ways to sell the same 30 servers.
Blended average revenue lands near ₹40,000 per rack per month once the service mix matures — against a fully-loaded OPEX of ₹40–50 lakhs a year.
Rack colocation
Full rack (42U)₹80,000/mo
Half rack (21U)₹45,000/mo
Quarter rack (4U)₹15,000/mo
Power overage₹600/kW/mo
Dedicated hosting
1U · 32GB RAM₹15,000/mo
2U · 64GB RAM₹25,000/mo
Custom RAM₹100–150/GB
Bandwidth, 1TB₹15,000/mo
VM hosting
Basic · 2vCPU/4GB₹1,500/mo
Standard · 4vCPU/8GB₹2,900/mo
Premium · 8vCPU/16GB₹4,600/mo
Storage, per TB₹1,200/mo
Managed services
Server management₹3–8K/mo
Backup & DR₹1–7K/mo
Security monitoring₹5–10K/mo
24×7 NOC support₹20–50K/mo
04 / 5-Year Trajectory
From ₹16L EBITDA to ₹312L, as occupancy compounds.
Conservative model: Phase 2 expansion to 75 servers in Year 3, Phase 3 to 150+ in Year 5.
Revenue (₹ Lakhs)
EBITDA (₹ Lakhs)
| Year | Capacity | Occupancy |
|---|---|---|
| Y1 | 30 servers | 40–60% |
| Y2 | 30 servers | 60–90% |
| Y3 | 75 servers | 70% |
| Y4 | 75 servers | 85% |
| Y5 | 150 servers | 80% |
EBITDA margin expands from 32% in Y1 to 83% by Y5 as fixed power & network costs amortize over a larger base. Cumulative cash flow model shows payback within 15–18 months of go-live.
05 / Government Incentives
Gujarat's IT Policy underwrites a real share of the build.
Roughly ₹1 crore in incentives over five years, stacked on top of the base return model.
₹35 L
CAPEX support
25% of eligible CAPEX (excl. land/lease), capped at ₹150 Cr — paid after Month 12 against verified invoices.
₹3.7 L
Power tariff subsidy
₹1/kWh on ~6,174 monthly units, for 5 years.
₹7.3 L
Electricity duty exemption
100% exemption on the 15% commercial duty, for 5 years.
₹52.5 L
Interest subsidy
Up to 7% subsidy on term loan interest, over 5 years.
₹2.5 L
EPF reimbursement
100% for female hires, 75% for male hires, annually.
DGVCL
Recommended distributor
Saves ~₹2.78 L/year in fixed and energy charges versus Torrent Power.
06 / Valuation & Terms
₹3 Cr at a ₹12 Cr pre-launch valuation.
That's roughly 20% equity, priced conservatively against a 6x EBITDA multiple on Year-1 economics — before any expansion is credited.
Pre-launch
₹12 Cr
Conservative current valuation, before go-live.
Year 2 target
₹18–20 Cr
Once the facility crosses 60–90% occupancy.
Year 5 opportunity
₹30+ Cr
At 150+ servers across an expanded footprint.
| Scenario | Probability | 5-yr return |
|---|---|---|
| Optimistic — 80%+ occupancy by Y2, expansion accelerated | 20% | 4–5x |
| Conservative — 50% occupancy by Y2, limited expansion | 10% | 1.5–2x |
Unit economics
| Contribution margin per rack | ₹54,000/mo (~60–65%) |
| Break-even | 5–6 racks sold |
| Payback period | 30–36 months |
| Expected 5-year ROI | 280–320% |
07 / Risk & Position
What could go wrong, and where the moat actually is.
High
Competition entry
Brand building, service quality and long-term contracts as the primary defense.
Medium
Slow market adoption
Mitigated via early customer partnerships and competitive entry pricing.
Medium
Cyber security breach
ISO 27001, SOC 2 alignment and DLP tooling from day one.
Medium
Talent retention
Competitive compensation and a genuine growth path as the team scales.
Low
Power interruption
Redundant UPS + DG with insurance cover backing SLA commitments.
Low
Cooling system failure
N+1 CRAC design with continuous monitoring and a maintenance contract.
Competitive set
Local colocation (small players)
- 2–3 facilities, under 50 racks each
- ₹40,000–50,000/rack
- Basic service quality
Mumbai / Bangalore majors
- Equinix, CtrlS and similar
- ₹50,000–70,000/rack
- 60–90ms latency into Surat
Data Center Surat
- 1–5ms local latency
- ₹32,000–35,000/rack (10–20% cheaper)
- Bundled managed services, 24–48hr onboarding
08 / Exit Strategy
Three credible paths, five to seven years out.
60% probability
Strategic acquisition
Equinix, CtrlS, Yotta Infrastructure or Databox as likely acquirers, at an expected ₹80–120 Cr valuation.
4–8x return
30% probability
IPO
Requires ₹200+ Cr revenue run-rate and 40%+ margins, plausible by Year 4–5.
10–15x return
10% probability
Hold & dividend
Stable ₹150+ Cr annual cash generation, distributed as 20–30% annual dividends.
Regional powerhouse