Maharashtra state’s new policy incentivizes three 500MW Green Integrated Data Centre Parks with substantial investment requirements

• Mumbai’s data centre market experienced significant transformation in 2024, driven in part by the migration of BFSI (Banking, Financial Services, and Insurance) players to colocation facilities. This shift is primarily motivated by regulatory requirements and the growing need for AI-ready infrastructure.
• Adding to this demand are hyperscalers seeking GPU clusters for AI training. The recent launch of cloud-based AI services in Mumbai further emphasizes the city’s emerging role as a key player in the global AI landscape.

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• Existing colocation operators are accelerating construction on existing land banks, while new land acquisitions are underway. Hyperscalers are securing large land parcels near power sources for self-build projects.
• This approach allows them greater control over design and scalability, crucial for meeting their unique, high-capacity demands, especially for specialized infrastructure like GPU clusters for AI training.

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• The Maharashtra government’s amended data centre policy, offering incentives for green integrated data centres, is a significant catalyst for investment.
• This policy, coupled with Mumbai’s status as a financial hub and its strategic location, makes it an attractive destination for data centre development.

Outlook

• For Users
  •Near-term availability will be under pressure.
  •Transition and adoption of AI infra will be a challenge.
  •Rents are likely to remain firm on account of increased capex cost.
• For Providers
  •Colo demand from BFSI and financial trading firms will continue.
  •There is potential for power constraints with higher supply growth.
  •Rise in AI workloads will make the Navi Mumbai market more prominent.