Hiranandani’s Yotta Data Services files application with SEC to list in US-OxBig News Network

While Gupta did not disclose the final intended size of the initial public offering (IPO), a presentation by the company to the SEC said that the listing “is expected to result in approximately $463 million ( ₹4,064 crore) of cash added.”

The final public market registration form was filed by Yotta with the SEC on 30 December, through its holding entity Nidar Infrastructure.

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“We are in process of our public listing process with the US SEC. While we are not disclosing the final official size of our IPO, this will be the first time when the promoters of the company are diluting the equity structure behind Yotta. We don’t have a date to share yet, but the public listing is expected very soon depending on regulatory clearance,” Gupta said.

Yotta Data Services, backed by real estate major Hiranandani Group, currently operates two active data centres in Mumbai and Noida. Incorporated in 2019, the company rose to prominence last year after signing a partnership with US’ Nvidia Corp for its much-vaunted GPUs (graphic processing units or chips). The company has 32 megawatts (MW) of data centre capacity at the moment, as well as five additional data centre projects in the making—one of which is in Bangladesh.

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Gupta, an industry veteran who previously led Yotta’s competitor NTT in India for nearly a decade, first told Mint about Yotta’s plan for a public listing in March last year. At the time, Yotta, as part of its agreement with Nvidia, had agreed to receive supplies of 16,000 GPUs in a staggered manner.

The public listing of the company is expected to help the company fund both the above-mentioned projects—expanding data centre facilities, and taking supplies of Nvidia’s GPUs.

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To be sure, GPUs are the fundamental component for artificial intelligence infrastructure globally, offering high-performance processors that can help companies process massive troves of data and train algorithms. This helps create AI ‘models’, which are among the world’s most vital commodities today.

While the advent of AI in mainstream industries has seen Nvidia’s valuation surge by over 20x to a peak of over $3.6 trillion in November last year, it has also helped ancillary companies such as Yotta grow at a rapid pace. Nvidia’s GPUs, which are manufactured by Taiwan Semiconductor Manufacturing Company (TSMC)—the world’s largest chip foundry, are in high demand and short supply. Yotta is hoping to capture a share of this heightened demand to grow.

“We already have over 4,000 GPUs installed and live in our existing data centre facilities, and have another 2,000 additional GPUs that are being brought live at this moment. We’ve already received two major clients who are leveraging this infrastructure, and we’re also supplying over half the number of advanced chips that are being sourced by the government of India under its AI Mission,” Gupta said, underlining the company’s current progress of work.

Industry analysts and consultants said that such a move could be largely positive for the company’s future growth. Jayanth Kolla, partner at technology consultancy firm Convergence Catalyst, said that listing in the US could help Yotta sustain growth in a geopolitically fragmented technology world today.

“Yotta is just over five-years-old, which suggests that it is going for a premature public listing in comparison with what’s typically seen among startups. But, it is an AI infrastructure company, and its capex needs justify the listing too. This is an overall positive move, since the US SEC clearance is a stringent regulatory certification to get. With the US also becoming more guarded about using its own AI data centres through Stargate, this could be a good moment for Yotta to cash in on a rapid growth opportunity. Weaker market sentiments in India right now are also likely a factor here.”

While Gupta did not share details on the company’s valuation, its presentation with the SEC, a copy of which was seen by Mint, pegged its enterprise value at $4.2 billion. Yotta has been bootstrapped by Hiranandani Group so far.

After closing FY24 as a private company in India at annual gross revenue of $44.6 million from its data centre and AI business, Yotta’s projection, detailed in the presentation, said that the company expects to finish the current fiscal at a revenue of $143.3 million—a jump of over 3x. However, data centre and AI infrastructure expansion is a capital-intensive business, including the cost of real estate, electricity consumption and advanced cooling infrastructure. Nvidia’s GPUs, too, currently retail at around $40,000 per GPU, three senior industry consultants told Mint.

This capex has led to Yotta failing to turn in profits as of now. The company expects to close FY25 with a net loss of $113 million after interest and taxes—but projects its losses to nearly halve to $62 million next fiscal.

However, this could come at rising debt. Yotta’s net debt for this fiscal was reported at $1.1 billion in the presentation filed with the SEC in June last year. By FY26, this figure could rise to $1.4 billion as it targets expansion of its GPU infrastructure.

Gupta, however, sounded bullish about the company’s prospects. “We’re listing in the US because currently, more than 70% of our AI deals are coming from North America. In the near future, we expect AI compute demand to become the major driver of our revenue, while North America is likely to have the highest amount of demand for AI infrastructure. Listing in the US will help us offer regulatory certainty to clients in the region, which is why we strategically decided to list there instead of here,” Gupta said.

Yotta is not the first Indian company to follow this path. Tech services outsourcing firm Freshworks, founded in 2010 in Chennai, did the same when it listed on Nasdaq in September 2021 in a $1.03-billion IPO. Like Yotta, Freshworks’ primary revenue stream is also from North America—as of the September quarter, 46% of its revenue came from there alone.

Gupta added that listing in the US could help the company take a “two-pronged approach to future growth.”

“On one hand, we’ll look to capture an increasing market share in the Americas by being compliant with local regulations and offering competitive pricing. On the other, we’ve applied to become the single largest supplier of GPUs to the ministry of electronics and information technology (Meity) for the India AI Mission—which will make us a crucial stakeholder of the global AI growth trajectory,” Gupta said.