Sify Infinit Spaces Limited IPO

01At a glance

What the company does: colocation data centres: it houses clients' computing, storage and network equipment and supplies space, power and connectivity; it had 14 facilities in six cities, including Mumbai, Chennai, Noida and Hyderabad, and 188.04 MW of built IT power capacity at June 2025 (DRHP p.22, DRHP p.147). Its first data centre began operating in 2000 (DRHP p.22).

Who pays it: hyperscale cloud providers and large enterprises; the top ten clients, including all its hyperscaler clients, were 82.26% of revenue in the June 2025 quarter (DRHP p.26).

Why it is raising money: ₹4,650.00 million to complete tower B at Siruseri, Chennai, ₹8,600.00 million for towers 11 and 12 at the Rabale data centre, ₹6,000.00 million to repay borrowings, and the rest for general purposes (DRHP p.23).

How fast it has grown: revenue from ₹10,213 million in FY23 to ₹11,142 million in FY24 and ₹14,284 million in FY25, and ₹3,986 million in the three months to June 2025 (DRHP p.25).

The one thing to understand: a capital-hungry infrastructure business with high operating margins and heavy debt. EBITDA margin was 44.33% in the June quarter, but depreciation and interest left profit before tax at 4.92% of revenue; net debt was ₹27,389.76 million, and investing outflows of ₹26,772 million over FY23 to June 2025 far exceeded operating cash flow (DRHP p.146, DRHP p.147, DRHP p.452, our arithmetic).

02The business, in plain words

A colocation data-centre operator builds secure, cooled, powered halls and leases racks and power to clients who install their own servers; it earns rent for space, charges for power and fees for connections.

A cloud provider needs capacity in Chennai → it contracts Sify for several megawatts in a data-centre tower → Sify builds and powers the hall → the provider installs its servers and pays monthly for space, power and cross-connects.

Revenue is from colocation services including lease rentals, power and cross-connects (DRHP p.147). Of 188.04 MW built, 113.67 MW was operational at June 2025 (DRHP p.147).

Earnings equation: Profit ≈ operational MW × revenue per MW − power and operating cost − depreciation − interest. EBITDA margin was 44.33% in the June quarter (DRHP p.146).

03Where the money comes from

Source: DRHP p.26, DRHP p.147. Q1 FY26 is three months.

04The growth record

Source: DRHP p.25, DRHP p.146, DRHP p.147, DRHP p.452. Q1 FY26 is three months.

Other income was ₹259.10 million in FY25 against profit before tax of ₹1,802.64 million, 14.4% of it (our arithmetic, DRHP p.88), and debtor days moved from 79 at March 2023 to 62 at March 2025 (DRHP p.48).

05What the growth is made of

Capacity. Built capacity roughly doubled from 92.63 MW in FY23 to 188.04 MW, and revenue rose 28.20% in FY25 (DRHP p.146, DRHP p.147). Operational capacity grew more slowly, from 77.09 MW to 113.67 MW (DRHP p.147). June-quarter profit after tax was ₹136.32 million, 3.42% of revenue, against 8.85% in FY25 (DRHP p.147).

06Earnings quality

Operating cash is strong, ₹12,326.60 million from FY23 to June 2025, but investing spent ₹26,772.30 million over the same period, the gap met by financing inflows (our arithmetic, DRHP p.452). Profit before tax was 4.92% of revenue in the June quarter (DRHP p.146). The company has given a ₹1,387.50 million corporate guarantee for a term loan of an associate, SKVR Software Solution Private Limited (DRHP p.27).

07The balance sheet

Source: DRHP p.25, DRHP p.147. The June 2025 ratio is annualised (DRHP p.147).

08What the money is for

Source: DRHP p.23.

09Who is selling

Source: DRHP p.22, DRHP p.24. Both hold only convertible debentures that convert into equity before the red herring prospectus (DRHP p.22, DRHP p.24).

The offer of up to ₹37,000.00 million is a fresh issue of ₹25,000.00 million and an offer for sale of ₹12,000.00 million by Kotak Data Center Fund (KDCF) and Kotak Special Situations Fund (KSSF) (DRHP p.22, DRHP p.3).

10Promoters

The promoters are STL, Vegesna Ananta Koti Raju, Vegesna Bala Saraswathi, RCICPL and RVIIPL; only STL holds shares (DRHP p.22, DRHP p.24). The document lists dependence on STL for strategic direction among its top risks (DRHP p.27). Proceedings against the promoters include 2 criminal, 73 tax and 5 regulatory matters involving ₹3,168.36 million, including a ₹1,175.83 million GST show-cause notice to STL (DRHP p.26). The document names STL as Sify Technologies Limited, RCICPL as Ramanand Core Investment Company Private Limited and RVIIPL as Raju Vegesna Infotech & Industries Private Limited (DRHP p.7, DRHP p.8).

11Who already owns it

Source: DRHP p.24.

12What changed just before the IPO

• Capacity: built capacity up 52 MW in FY25, to 188.04 MW (DRHP p.147).
• Profit: June-quarter profit margin down to 3.42% (DRHP p.147).
• Net debt: up ₹4,154 million in the June quarter (our arithmetic, DRHP p.147).
• Conversions: preference shares and debentures convert into 93,819,168 shares before the red herring prospectus (DRHP p.24).
• Share history and auditor: the company was incorporated as a public limited company in November 2017, has issued no bonus shares, and has had no change of auditor in the three years before the DRHP (DRHP p.3, DRHP p.103, DRHP p.92).

13Capacity and expansion

Built capacity of 188.04 MW across 14 facilities, of which 113.67 MW operational at June 2025 (DRHP p.147). The proceeds fund a tower at Siruseri and two towers at Rabale (DRHP p.23).

14Market size and industry structure

The 1Lattice and C&W report cited in the offer document projects India's data-centre demand to grow 30.1 to 35.1% a year in IT MW terms over FY2025 to 2030 (DRHP p.22). Those projections are the report's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• One of the leading colocation providers by built IT power, citing 1Lattice and C&W (DRHP p.22).
• A 25-year operating record from its first data centre in 2000 (DRHP p.22).

Against that: ten clients for 82% of revenue, power supply and cost, cyber risk, technology change and the capital intensity of the business (DRHP p.26, DRHP p.27).

16Peers the company named

The document gives the listed peers' P/E range as 100.90 to 115.46, average 108.18; NEXTDC's P/E is not meaningful because of a FY25 loss (DRHP p.144). The full peer table was not read for this study.

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Clients. Ten clients were 82% of revenue (DRHP p.26).
• Power. Supply cuts and rising power cost (DRHP p.26).
• Security. Cyber-attacks and breaches (DRHP p.26).
• Capital. The business needs more capital than it generates (DRHP p.27).
• Parent. Dependence on STL (DRHP p.27).

18Litigation and regulatory matters

Source: DRHP p.26. The Income Tax Department has also filed 20 appeals against STL in the Madras High Court whose amounts cannot be quantified (DRHP p.26).

19Related-party transactions

STL, the holding company, charged the company ₹526.88 million of expenses in FY25, received ₹227.71 million of lease rentals and ₹133.50 million of interest on debentures (DRHP p.27).

20What the offer document does not say

In the sections read for this study, the document does not give:

• Who the hyperscaler clients are and how long their contracts run, in the pages read.
• Why 74 MW of built capacity is not yet operational, in the pages read.
• Why the company guarantees an associate's ₹1,387.50 million loan, in the pages read.
• What the criminal proceedings against the company concern, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. How much of the 188 MW built is contracted to clients, and when will the rest start earning?
2. What are the terms and remaining lives of the hyperscaler contracts?
3. How will services and costs shared with Sify Technologies be priced after listing?
4. Why does the company guarantee SKVR Software Solution's term loan?
5. Why did profit margin fall to 3.4% in the June 2025 quarter?

1Sources and cited facts

This study was read from 1 document the company filed. The 55 figures it cites are listed under the document each came from, with the page and the sentence as printed.