Yotta targets up to $1.5 billion IPO as AI infrastructure demand grows

Yotta Data Services is planning to launch an initial public offering (IPO) in the January to March quarter of 2027, as India’s growing demand for artificial intelligence infrastructure pushes data centre companies towards the public markets.

The Hiranandani Group-backed data centre operator plans to file its draft IPO papers in October and could seek to raise as much as $1.5 billion, or roughly ₹14,200 crore. Yotta CEO Sunil Gupta told Reuters that the proceeds will be used to repay debt, purchase graphics processing units (GPUs) and expand the company’s sovereign cloud infrastructure in India.

The planned IPO comes at a time when demand for AI computing capacity is rising sharply. Large technology companies, including Google and Amazon, are expanding their data centre presence in India as businesses require more computing power for artificial intelligence applications.

Yotta is already raising capital before its public listing. Gupta said the company recently raised $150 million in primary growth capital at a valuation of around $3.9 billion. Because a significant portion of its funding requirements has already been met through pre-IPO financing, the eventual IPO could be smaller than the initial target.

The company says it is the largest provider of Nvidia-powered AI infrastructure in India. Its expansion plans reflect the huge amount of capital now required to build and operate AI data centres. GPUs, power systems, cooling equipment and specialised data centre facilities all require substantial investment.

Yotta is also looking to expand its sovereign cloud business, which allows data and computing workloads to remain within India’s borders. This could become increasingly important as companies and governments place greater emphasis on data security and national control over digital infrastructure.

India is becoming an increasingly attractive location for data centre investment. Yotta’s Gupta said power constraints and shortages of GPUs in the US and Europe are encouraging more AI infrastructure investment in India. Geopolitical uncertainty in other regions is also influencing companies when deciding where to locate computing capacity.

The company has a significant international customer base. Gupta said global clients account for around 75% to 80% of Yotta’s customers. A 20-year tax holiday announced by the Indian government for foreign companies using local data centres has also helped strengthen confidence among overseas customers, according to Gupta.

Yotta is exploring alternative ways to finance expensive GPUs as well. Under one proposed structure, partners could purchase GPUs through special-purpose vehicles, share the revenue generated by the equipment and eventually transfer ownership to Yotta after four to five years.

For investors, the proposed listing offers another way to gain exposure to India’s expanding AI infrastructure market. However, the business also faces high capital requirements, technology costs and the challenge of turning rapid demand for computing capacity into sustainable profits.

Yotta’s IPO will therefore be closely watched not only as a major fundraising exercise, but also as a test of investor appetite for India’s emerging AI infrastructure sector.