Anant Raj Shares Surge 12% as Data Center Tax Exemption Looms

Anant Raj, a leading real estate developer in the National Capital Region (NCR), witnessed a significant 12% surge in its share prices during intraday trading on Monday, September 15. The shares hit a high of ₹595.50, marking the company's biggest intraday jump in 13 months. The sharp rally was primarily driven by reports suggesting that the Indian government is considering a tax exemption of up to 20 years for data center developers.

Though primarily known for its real estate activities, Anant Raj has diversified its portfolio towards data centers to capitalize on the growing demand for data center infrastructure. The company's strategic move into this sector is part of a broader vision to invest ₹100 billion over the next few years to develop a 307 MW data center footprint.

The government's proposed tax exemption, which is subject to meeting certain targets on capacity addition, energy efficiency, and job creation, is expected to significantly boost the data center sector. According to a draft of the National Data Centre Policy reviewed by Business Standard, the Ministry of Electronics and Information Technology (MeitY) is likely to request the Ministry of Finance to allow input tax credit (ITC) on the goods and services tax (GST) levied on capital assets, such as data center construction, heating, ventilation, and air conditioning.

“This will help create new jobs as well as strengthen domestic capacity in advanced technologies, such as AI, cloud computing, and cybersecurity, not just in metro cities but also in Tier-II and Tier-III towns,” an official told Business Standard.

Anant Raj's data center capacity currently stands at 28 MW, following the recent commissioning of a 22 MW addition. The company's initial data center capacity was 6 MW, including 0.5 MW of cloud capacity. Analysts from domestic brokerage firm Emkay Global Financial Services expect a client onboarding over the next 3-4 months. They also anticipate the company achieving 63 MW / 107 MW capacity by H2FY27 / FY28E and believe that the overall target of 307 MW DC will be achieved by FY33-34E, contingent upon fundraising.

The demand for data centers in India is on the rise, driven by both structural and cyclical factors. A large internet user base generating vast amounts of data, the government's push for data localization, and the increasing adoption of artificial intelligence (AI) are some of the key structural tailwinds. According to ICRA estimates, India’s data center operational capacity is expected to increase to 2,000–2,100 MW by March 2027 from around 1,150 MW as of December 2024.

In summary, the potential tax exemption for data center developers, combined with Anant Raj's strategic diversification into this sector, has significantly boosted investor confidence, leading to the sharp rise in the company's share prices. As the data center market continues to grow, Anant Raj is well-positioned to capitalize on this trend and achieve its ambitious targets.

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