KKR to acquire 20% stake in singTel’s data centre business. - Attached article.
As per article, this deal is valued at 4.03 Billion USD. And singTel is planning to expand their datacentre business from current 62 MW to 200 MW in future.
So as per rough calculation of 4.03 Billion / 200 MW, it comes around 160 Cr. / MW deal. This is a very high end deal, as generally, new data centre cost is about 50 Cr /MW. So there must be some kind of brand value / country specific value / revenue projection gurantee value may be taken in this deal. ( this is my assumption )
However, point of interest for me is that Techno electric is currently building 24 MW data centre in chennai. ( phase 1 in commissioning stage ). And their plan is to build 300 MW by 2030. Having said that One has to keep in mind that Techno may not build all datacentre for themselves and may build some of these projected data centre for their clients as an EPC player.
Even then, at current MCAP of 5500 Cr. ( debt free balancesheet, includes 1400 Cr. Cash & EPC business ) it looks like market is either not factoring in / giving very little value to their data centre business segment…
Having said that, there has been appreciation lately in price of about 30% or so, but in my view its is mainly because of their increasing orderbook in epc segment and anticipation of good orderbook in smart meter segment.
Market may well be waiting for completion of their first phase of data centre as well wanting to see as to who will be their strategic partners in their JV for chennai data centre…
All in all, data centre business for techno electric looks good for a business rerating opportunity in time to come.
Disc: Invested since '22 ,one of my top allocation in portfolio. Biased views.
Not a recommendation to buy/ sell. Do your own research well.
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