SETL Acquires Majority Stake in GScale Energy, Commits Rs 500-Cr for AI Data Centre Expansion
Hyderabad, June 25 (TNT): Standard Engineering Technology Limited (SETL) on Thursday announced the acquisition of a majority stake in GScale Energy Private Limited, a specialised engineering and infrastructure company focused on the fast-growing AI data centre sector.
In a release, the company said it proposes to acquire up to 51 per cent equity in GScale Energy through a combination of primary capital infusion and a strategic share-swap arrangement with existing shareholders, involving an investment of about ₹190 crore in the first phase.
SETL has also approved a total investment of nearly ₹500 crore for equity acquisition, capacity expansion and working capital requirements of the combined business. The entire investment programme will be funded through internal accruals without raising fresh debt.
The acquisition marks SETL’s entry into the AI and hyperscale data centre infrastructure segment, extending its engineering capabilities beyond the pharmaceutical, chemical and biotechnology sectors.
India’s AI and hyperscale data centre infrastructure market is projected to attract investments of USD 20-25 billion by 2030, and SETL aims to emerge as a leading engineering partner in the sector, the company said.
Under the arrangement, GScale Energy will continue to be managed by its founder and leadership team, while SETL will provide strategic guidance, capital support and access to its manufacturing and execution capabilities.
Commenting on the development, SETL Managing Director Nageswara Rao Kandula said the investment represented a natural evolution of the company’s engineering expertise and would help build a platform capable of delivering end-to-end AI data centre solutions.
GScale Energy Founder and Director Kasu Brahma Reddy said the partnership would strengthen the company’s ability to deliver world-class AI data centre engineering solutions by leveraging SETL’s financial strength, manufacturing scale and engineering depth.
GScale Energy currently operates around four lakh square feet of infrastructure and plans to expand its capacity to 10 lakh square feet by FY2028 through a phased growth strategy.
SETL reported revenue of about ₹793 crore in FY2026 with an EBITDA margin of 17.4 per cent. The company holds cash and liquid assets of around ₹220 crore and received an upgraded CRISIL rating of A/Positive in April this year.
Looking ahead, SETL said it is targeting 40-50 per cent revenue growth in its core engineering business during FY2027, subject to market conditions and execution performance.
Manufacturing operations under the AI infrastructure platform are expected to commence from November 2026. The company has projected revenue of around ₹250 crore from the new vertical in FY2027, subject to project execution timelines and customer schedules.
The acquisition is expected to strengthen SETL’s position in the emerging AI infrastructure ecosystem by combining its manufacturing and engineering capabilities with GScale’s specialised expertise in data centre development, the company added.
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