Amazon pumps more money into local data centre unit amid Covid-induced rising data usage in India

Jeff Bezos’ Amazon, which has been on an investment spree across its e-commerce, payments, and other businesses in India, has put money into its Indian data centre arm Amazon Data Services India (ADSIPL). Amazon.com along with affiliated firm A100 Row has invested Rs 150 crore into ADSIPL and have been allotted 15 lakh shares and 14.85 crore shares respectively having a face value of Rs 10, according to the recent regulatory filings sourced from business signals platform Paper.vc. Majority amount of Rs 148.5 crore was invested by A100 Row while the rest Rs 1.5 crore came from Amazon.com. Amazon had in February this year infused Rs 2,500 crore into Amazon Data Services India and the marketplace unit Amazon Seller Services.

The data centre market in India has witnessed a strong tailwind due to the Covid pandemic in around the last six months as data consumption saw a sharp increase of 38 per cent year-on-year in Q1 FY21, according to a Crisil report. This is further likely to grow at a CAGR of 25-30 per cent to $4.5-5 billion by FY25 on the back of an exponential surge in data being generated and the rising need for local data storage in line with the government’s focus on data localization, according to the November report titled Demand for Data Centres Goes Viral.

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Singapore-based parent Amazon Corporate Holdings Private Limited and Amazon.com based in Mauritius had last month put Rs 700 crore into its e-payment business Amazon Pay, according to the filings accessed by Tofler. This year, the parent company had invested Rs 2,310 crore and Rs 1,125 crore in July and September respectively into the marketplace arm while Amazon Seller Services and Amazon Data Services had secured Rs 2,500 crore in February. The payments and wholesale business of Amazon in India had secured Rs 1,700 crore in January this year. Amazon.com and A100 Row had invested Rs 1,381 crore in the data services business in India back in July 2017 as well.

Amazon had in 2016 launched a data centre in Mumbai and had earlier this year proposed to set-up two data centers in Telangana at a likely price of Rs 11,624 crore. Flipkart had also set-up a data centre in Hyderabad last year after setting-up one in Mumbai.