New Delhi, June 25 -- Hyderabad-based precision and multidisciplinary engineering company Standard Engineering Technology Ltd (SETL) has proposed to acquire a majority stake in GScale Energy Pvt Ltd, a company specializing in artificial intelligence (AI) datacenter engineering infrastructure.
The publicly-listed company plans to acquire up to a 51% stake in GScale Energy through a combination of a primary capital infusion and a share-swap arrangement with existing shareholders, it said In a regulatory filing.
SETL has committed around Rs 190 crore ($20.1 million) towards the Phase I investment.
The acquisition is part of a broader phased programme under which SETL's board has approved a total investment outlay of around Rs 500 crore ($52.9 million). The capital will be deployed towards the equity acquisition, capacity expansion, and working capital requirements of the combined entity.
The company said the investment will be entirely funded through internal cash flows and accruals, with no additional debt being taken on.
The acquisition marks SETL's entry into the digital infrastructure segment, extending its engineering expertise beyond the pharmaceutical, chemical and biotechnology sectors.
The move comes amid a significant investment boom in India's AI and hyperscale datacenter sector, which is expected to attract between $20 billion and $25 billion in investments by 2030.
"The same precision and integrated execution capability that made us a trusted engineering partner to pharma and chemical companies will now power the datacenters driving the AI revolution," said Nageswara Rao Kandula, managing director of SETL.
GScale Energy will continue to be led by its founder and director, Kasu Brahma Reddy, a 25-year veteran of the datacenter industry and former president of CtrlS Datacenters Ltd.
The company currently operates around 4 lakh square feet of infrastructure and plans to expand this to 10 lakh square feet by FY28 through phased expansions.
Manufacturing operations for the newly established AI infrastructure engineering platform are expected to commence in November 2026.
Accordingly, FY27 will include roughly four months of contribution from this business vertical, from which the management expects to generate revenue of around Rs 250 crore.
For the financial year ended March 31, 2026, SETL reported revenue of around Rs 793 crore and an EBITDA margin of 17.4%. The company had cash and liquid assets of around Rs 220 crore, while its credit profile was upgraded to an 'A/Positive' rating by CRISIL in April 2026.
Looking ahead, SETL expects its core business to deliver revenue growth of 40-50% in FY27, subject to market conditions and execution outcomes, supported by a strong order pipeline and robust customer demand.
Published by HT Digital Content Services with permission from VC Circle.