Anant Raj Ltd has approved a Composite Scheme of Arrangement to split into two independently listed companies: one focused on real estate and infrastructure, the other on data centres and cloud services. The Board approved this restructuring on July 21, 2026, under Sections 230-232 of the Companies Act, 2013. Others +1
The rationale is straightforward. The company's real estate business and data centre operations have evolved into two distinct platforms with different growth trajectories, operational priorities, and capital needs. Continuing both under one corporate structure doesn't adequately reflect the true potential of each business segment. Investors often question how a real estate company can build a technology business of this scale. The demerger addresses this by enabling independent market recognition and valuation of the data centre business, given its distinct operating profile, growth trajectory, risk-return characteristics, and funding requirements. Others +2
The separation creates clear strategic focus. Anant Raj Ltd will continue strengthening its position in real estate and infrastructure development, leveraging its 320 acres of fully paid, ready-to-develop land bank in Delhi-NCR. The company anticipates revenue potential of approximately ₹15,000 crore from residential sales in Sector 63A, Gurugram over the next 4-5 years. AnnualReports +1
Ashok Cloud Pvt Ltd emerges as a dedicated digital infrastructure and cloud services company. It currently operates 28 MW of IT load across Manesar (21 MW) and Panchkula (7 MW), with a clear roadmap to 357 MW capacity by FY32. The company targets 63 MW by December 2026 and 117 MW by FY28. InvestorPresentations +3
The data centre business generates ₹176.49 crore in revenue (7% of consolidated revenue) with impressive 75% EBITDA margins. Colocation services generate approximately ₹90 lakhs per MW per month, while cloud services offer significantly higher returns at approximately ₹12 crores per MW per month. Cloud services demonstrate strong economics with a payback period of roughly 2 years. InvestorPresentations +3
The total estimated development cost for the data centre and cloud infrastructure expansion is approximately ₹7,486 crores. However, Anant Raj maintains a significant cost advantage over industry standards: the company requires only ₹26 crores per MW of additional capital investment since it already owns the land and buildings, compared to competitors who typically need ₹55-60 crores per MW for greenfield developments. Others +2
The company maintains a net debt-free status and funds data centre expansion primarily through internal accruals. The company explicitly states it is "not taking on any debt for data center at all" and funds expansion completely from internal resources. Strong cash generation from real estate projects, particularly the Sector 63A Gurugram development, provides additional support. The company has also raised ₹2,100 crores specifically for data center/cloud business expansion and invested ₹175 crores in subsidiary Anant Raj Cloud Private Limited for data center development. Transcripts +3
The demerger positively impacts Anant Raj Ltd's ability to fund real estate projects. Post-demerger, the real estate business can independently raise capital without competing for resources with data centre expansion. The company's net debt reached ₹0 in FY26, down from ₹1,010 crores in FY23, with total equity of ₹5,788.71 crores and healthy cash reserves of ₹899.46 crores. Others +4
Eligible Anant Raj Ltd shareholders will receive one fully paid-up equity share of face value ₹2 each in Ashok Cloud for every one share held in Anant Raj Limited. This allows shareholders to directly participate in the growth potential of both businesses while benefiting from independent market-driven valuations. Others +2
The current combined structure suffers from a conglomerate discount where the market cannot properly value distinct business units. Independent recognition enables sum-of-parts valuation, allowing each business to be valued based on sector-specific metrics. Data centre companies typically trade at different (often higher) multiples compared to real estate developers, reflecting their growth potential and recurring revenue characteristics. AnnualReports
Data centre/IT infrastructure sector commands significant premiums—Netweb Technologies trades at 200% premium on P/E and 784% premium on P/B. The 1:1 swap provides strategic access to this high-growth sector from a reasonably-valued real estate platform.
However, shareholders face risks. The Composite Scheme requires approvals from shareholders, creditors, stock exchanges (BSE, NSE), SEBI, and NCLT. Based on historical precedent, the complete process could take approximately 2 years from board approval to effective date. Execution delays or regulatory setbacks could erode shareholder value through increased costs and postponed benefits. Market uncertainty during the transition period may lead to stock price volatility. Others +3
The demerger creates dependencies between Anant Raj Ltd and Ashok Cloud Pvt Ltd. ACPL will continue to be a subsidiary of ARL following the Composite Scheme, which may create governance complexities and potential conflicts of interest. The allocation of debt and obligations between the two entities could affect their respective financial profiles and credit ratings. Others +2
The risk to achieving 117 MW IT load capacity by FY28 is assessed as low to moderate. The company has a significant 3-4 year timeline advantage over competitors because it already possesses ready land and certified buildings, whereas new entrants would need to procure land, obtain approvals, and construct specialized buildings from scratch. Building certifications are already completed and rated by data center expertise bodies. The company maintains strong liquidity and multiple funding sources. Transcripts +2
Key monitoring points include MeitY empanelment timeline (critical for cloud expansion), real estate approval velocity (impacts cash flow generation), and equipment supply chain constraints.
Ashok Cloud is positioned as "India's First Sovereign Cloud" platform, launched in October 2024 in strategic partnership with Orange Business Services. The platform offers Infrastructure as a Service (IaaS), with plans to expand into Platform as a Service (PaaS) and Software as a Service (SaaS). It is officially empanelled with Ministry of Electronics and Information Technology as a Sovereign Cloud Service Provider. AnnualReports +1
The company's AI-ready infrastructure is specifically designed to support emerging technologies and AI workloads. A strategic partnership with Submer Technologies (Spain) enables development of operational, AI-ready, liquid-cooled data centres across India. The platform recognizes Generative AI and Machine Learning as key growth drivers for data centre demand. InvestorPresentations +2
Ashok Cloud derives significant competitive advantages from Anant Raj Ltd's existing campus locations. The company leverages 50 years of real estate development experience and 320 acres of ready-to-develop land bank in Delhi-NCR. Existing technology parks in Manesar, Rai, and Panchkula are already equipped with essential infrastructure and regulatory approvals. This backward integration strategy creates rare, end-to-end capabilities that few competitors possess. AnnualReports +3
The cost advantage is substantial: ₹26 crores/MW vs industry standard of ₹55-60 crores/MW. Pre-existing infrastructure accelerates deployment compared to greenfield projects. The company maintains early mover advantage in Delhi NCR data centre market, allowing premium positioning and cost recovery. Transcripts +3
The demerger positions Ashok Cloud to attract strategic partnerships and investments through several mechanisms. As a dedicated digital infrastructure company with distinct growth drivers and operating models, it can attract sector-specific investors who can independently evaluate and value the business based on its unique risk-return characteristics. Others +1
The simplified corporate structure provides streamlined governance, enhanced transparency, and faster decision-making. This creates greater flexibility to attract sector-focused investors, pursue strategic partnerships, execute acquisitions, and secure growth capital. Others
Ashok Cloud has already established several strategic partnerships. The collaboration with Orange Business Services for sovereign cloud services offering IaaS, with plans to expand into PaaS and SaaS, provides technology partnership for comprehensive cloud service delivery. Government partnerships include MeitY empanelment as Sovereign Cloud Service Provider and BSNL as Data Centre Service Provider. An MOU with the Andhra Pradesh Government for setting up 50 MW IT load data centre capacity strengthens the company's footprint in South India. Others +2
The sovereign cloud positioning aligns with India's 'Atmanirbhar Bharat' initiative and digital economy vision. With 357 MW total planned capacity and clear expansion roadmap, Ashok Cloud presents significant scale and growth potential for strategic investors. Others +1
The demerger represents a strategic restructuring designed to provide greater strategic focus, management autonomy, and flexibility to pursue long-term value creation. By creating two independently optimized business platforms, Anant Raj Ltd aims to unlock significant shareholder value through independent market recognition of both businesses, dedicated management focus on respective verticals, tailored capital allocation strategies, and enhanced ability to attract sector-specific resources and partnerships. Others +1
For shareholders, the choice is between a conglomerate structure with embedded value or two focused entities with independent market recognition. The data centre business represents a strategic evolution from traditional rental income model to higher-margin, recurring revenue streams, while the real estate business continues as core development business with substantial land bank and established revenue streams.
The success of this value creation depends heavily on successful execution of the complex regulatory approval process, effective operational separation, and market acceptance of the two independently listed companies. With strong infrastructure foundation, clear growth roadmap, and strategic partnerships already in place, Ashok Cloud is well-positioned to capitalize on India's rapidly growing digital infrastructure sector.
