So, as per my estimation, he said in the podcast they are going to give out the rentals for a 42 RU [RU = Rack Units] for 30-40,000. Thus, taking an average of rental yield of INR 35,000/42 RU = INR 833/RU. There are racks with different intensities. 1 MW can be used to accommodate 7000 RUs at 10 kW per rack (i.e. considered as medium density) [assumption that they have medium density racks]. Therefore, the number of RUs are 7000 (approx.). Total revenue estimation, therefore, can be INR 833/RU x 7000 RUs/ MW x 5 MW x 12 months = INR 35 crore. [with capacity of 700 crore run rate in the future], which I don’t think includes power actuals.
Note: I have taken lots of assumptions. I may be way off. However, as per market rates, estimations, public data, that’s the best I could come up with.
The rental yields I feel should definitely get normalized in the long term. I agree there are capex barriers. However, in the immediate future, the firms should enjoy supernormal profits. As competition scales up, it should reduce. How much it might reduce by, I don’t know frankly.
The CWIP seems to be of 50 crore only on books right now, which is what the management has guided for also as capex for setting up the center.
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