India’s Sify has raised more than $70 million for new data centers.

The funding was announced during the company’s quarterly earnings results this week.

Sify and Sify Infinit Spaces Limited (“SIS”), a wholly owned subsidiary of Sify which operates its data centers, have entered into an agreement with Kotak Data Center Fund (KDCF), under which KDCF will invest up to Rs 6 billion (approximately $73 million) in the form of compulsory convertible debentures of SIS.

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– Sify Technologies

The company said SIS will use the proceeds for the expansion of new data centers, including land acquisition for data centers, investment in procuring alternate sources of power, and repayment of debt.

"Fiscal discipline will remain the cornerstone of our growth strategy as we scale investments into data centers and networks. By judiciously allocating investments and resources, we will seamlessly expand our infrastructure, invest in new resources and build competencies and scale," said Sify Technologies Group CFO M P Vijay Kumar.

"While we expect to see these investments impact profitability in the near term, they should enable us to aggressively pursue digital transformation engagements in the future," he added.

Kotak Alternate Assets, the investment arm of India’s Kotak Mahindra Bank, closed its maiden data center fund in February 2023 with $590m in funding, with the aim to invest in data centers across the country. Kotak previously invested $135m into Sify in 2021.

Sify’s revenue for the quarter was Rs 8.547 billion ($104.4m). EBITDA was Rs 1.724 billion ($21m), and the total profit was Rs 95 million ($116,000).

During the quarter, the company gained a public sector trading platform, an industrial chemicals firm, a public sector housing lender, and a mobile engagement platform as customers.

Kamal Nath, Sify CEO, said: “As Enterprises are pursuing their digital transformation and digitalization objectives, they are also re-calibrating their digital infrastructure across hybrid cloud, network, security, and Edge infrastructures. This is a great opportunity for us to monetize our infrastructures designed for Digital IT and transform the way digital infrastructures are managed through our digitalized services. We are topping that up by continuously building our core digital portfolio to support our customers' innovation journey.”

In September 2021 Sify announced plans to more than double its data center footprint in the country over the next few years and add 200MW in the next four years and subsequently raised $135 million from Kotak Mahindra Bank. The company said at the time it planned to develop new facilities in Mumbai, Noida, Chennai, Bangalore, and Hyderabad. Sify has also partnered with struggling US colo firm Cyxtera.