New Delhi, June 18 -- Bengaluru-headquartered real estate developer RMZ is likely to expand its joint venture with data centre operator Colt Data Centre Services (Colt DCS) as it aims to have a larger portfolio of projects in the next five years, a top company executive told VCCircle.
RMZ Digital Infrastructure Partners and Colt DCS struck a 50:50 joint venture (JV) back in 2024 with an initial commitment of $1.7 billion (then Rs 14,300 crore) to develop data centres with a total of 250 MW capacity across Mumbai and Chennai.
While the platform is executing its plan to develop 250 MW, it is also looking at expanding its portfolio to nearly ten times that to over 2 GW in the next five years. It currently has a ready and operational portfolio of 22 MW and the rest of the 228 MW is at different stages of development and execution.
RMZ Infrastructure's Chief Executive Officer Deepak Chhabria said that, based on client feedback and their assessment of demand over the next five years, they would like to end 2026 with enough land with power connectivity that can house data centre capacity between two and three gigawatts. "The JV board is still working through the detailed plan," he said, adding, "We believe the opportunity is significant. As of today, we are executing a plan that can take us to somewhere between two and three gigawatts over the next five years."
Out of the Rs 14,300 crore corpus, the JV has already committed 40 per cent for projects. The remaining 60 per cent will be committed progressively over the rest of the year across its portfolio of projects in Mumbai and Chennai.
"Data centres follow a construction cycle of roughly 20 to 24 months. Even if I sign a client today and begin building immediately, it takes time before all of the capital is actually deployed," he said, adding that a large portion of the current capital pool will be allocated to Mumbai, with the balance allocated to Chennai.
Capital deployment, fundraising
Chhabria added that the economics of building a data centre is straightforward. The investment cost works out to approximately Rs 70 crore per megawatt.
"Today, applying the current design assumptions and capacity numbers implies a naturally higher investment requirement. Both partners are already making commitments to the JV, and the board is considering broader plans for expanding the capacity. The fact that they are under discussion should itself tell you that both partners are excited about the opportunity," he added. The JV enjoys Colt's global data centre experience and RMZ's deep India experience.
"We are leveraging their global experience across multiple countries to accelerate our progress-whether in design, operations, or client acquisition. When you approach large BFSI institutions such as banks, exchanges and insurance companies, they want to see proven operating experience. Colt's global track record helps significantly in those conversations. There are multiple touchpoints where this partnership works extremely well," Chhabrai explained.
To expand the portfolio, the platform will add cities such as Vizag, Hyderabad and additional capacity in Mumbai in addition to existing capacity in Mumbai and Chennai. It is currently in talks to acquire land parcels in these cities and have signed exclusivity agreements to conduct due diligence.
Meanwhile, the parent entity RMZ is also in talks with the Canadian Pension Plan Investment Board (CPPIB) and Bain Capital to raise a massive $35 billion to ramp up its next phase of expansion. The company spokesperson have stated in the media that a large part of the planned fundraise will go towards expanding digital infrastructure play. The fundraise plan is ongoing even while the company is planning an IPO in the mid to long term.
Investors flock to sector
Data centres have been attracting a lot of capital lately. Mostly recently, CPPIB announced plans to invest Rs 7,000 crore into Indian data centre operator CtrlS Datacenters Ltd. The data localisation policy coupled with digital and AI boom has resulted in larger absorption of such spaces by companies from all sectors.
Chhabra added that over the medium term, we will see data centres across the country. "There are three sources of demand. A large portion of demand today comes from hyperscalers, which are concentrated in Mumbai, Chennai, Hyderabad and Vizag. As demand evolves from hyperscalers serving enterprise customers toward broader Indian demand, and as cloud and AI infrastructure increasingly serves domestic demand, you will see greater geographic dispersion," he said.
And he added that the country will also begin to see a significant increase in sovereign demand because of data localisation requirements and the development of more Indian LLMs. You will see increasing demand from government entities. "Sovereign demand is a large percentage of demand in many other markets globally," he said.
According to real estate consultancy firm JLL, India's data centre industry has reached substantial scale with total inventory standing at 1,123 MW of IT load capacity as of H1 2025, reflecting the sector's maturation into a critical digital infrastructure backbone.
"The market demonstrated exceptional absorption momentum during the first half of 2025, recording 97.9 MW of net take-up, representing a robust 48% year-on-year growth that underscores surging demand from hyperscale cloud providers, BFSI sector digitalization, and AI workload requirements," it said.
Despite this strong demand, the industry maintains remarkably tight supply conditions with vacancy rates compressed to just 4.3%, down from historical levels and signaling a supply-constrained environment that favors operators through sustained occupancy, the report added.
Published by HT Digital Content Services with permission from VC Circle.