Standard Engineering Technology (SETL) has successfully acquired a 51% majority stake in GScale Energy Private Limited, marking a strategic entry into the rapidly growing AI datacenter engineering sector. The acquisition, announced on Thursday, represents an important milestone in SETL's engineering expansion strategy, extending its decade-long expertise in concept-to-commissioning engineering solutions built serving the pharmaceutical, chemical, and biotechnology industries into the AI datacenter sector. As per the company release, manufacturing operations are expected to commence from November 2026, with FY2027 effectively capturing only approximately four months of contribution from this business vertical.
SETL has approved the acquisition through a combination of primary capital infusion and strategic share-swap arrangements with existing shareholders, committing approximately ₹190 crore for the first phase of the transaction. The acquisition is structured as ₹125 crore cash and ₹65 crore share swap. As part of a broader phased programme, SETL has approved a total investment of ₹500 crore to be deployed across equity acquisition, capacity expansion, and working capital for the combined business, with the entire investment being entirely self-funded through the company's internal cash flows. The company reported FY2026 revenue of approximately ₹793 crore and maintains a CRISIL rating of A/Positive as of April 2026.
With GScale's domain expertise, SETL is building a platform to deliver complete, concept-to-commissioning AI datacenter solutions at scale. Management is targeting revenue in the range of ₹250 crore from this vertical within the initial operating window of FY2027, subject to project execution timelines and customer schedules. SETL Managing Director Nageswara Rao Kandula emphasized that the same precision and integrated execution capability that made SETL a trusted engineering partner to pharma and chemical companies will now power the datacenters driving the AI revolution. Looking ahead to FY2027, management remains confident in the underlying strength of its core engineering business, with management targeting approximately 40-50% revenue growth in existing operations based on current order pipeline, customer engagements and ongoing growth initiatives.
The acquisition provides immediate access to GScale's domain expertise, including a track record of 486 MW delivered and 1 GW+ under execution. Once the transaction is completed, GScale will operate as a subsidiary of SETL. The combined business will aim to offer end-to-end AI datacenter engineering solutions, including power and cooling infrastructure, precision fabrication, automation, and commissioning. GScale Energy will continue to be led by its founder and existing leadership team, while SETL will provide strategic guidance, capital, and access to its manufacturing scale and integrated execution capability to support future growth. The move positions SETL to tap into the rapidly expanding AI data centre market, where global capital expenditure is estimated at US$5.2-6.7 trillion by 2030.
The acquisition positions Standard Engineering Technology to capture a market opportunity projected at $5.2–6.7 trillion in global AI datacenter capex by 2030, with $40–50 billion expected in India. India's AI and hyperscale data-center infrastructure market is expected to require investments of around $20 billion-$25 billion through 2030. The board-approved deal creates a two-platform engineering company, with Standard Engineering Technology continuing to serve the Pharma & Chemical sectors while GScale focuses on AI Datacenter Infrastructure. Management has approved a total investment of approximately ₹500 crore to be deployed across equity acquisition, capacity expansion, and working capital for the combined business, with the remaining ₹310 crore of the total investment plan to be funded beyond the initial acquisition consideration.
