Synopsis: Reliance Industries plans a ₹1.6 lakh crore investment to build India’s largest 1.5 GW data centre cluster in Visakhapatnam, Andhra Pradesh, with a captive solar battery system. Alongside global players like Google, this, supported by state incentives, positions Andhra Pradesh to become a major tech hub.
The shares of a Large-Cap company specialising in Oil-to-Chemicals (O2C), spanning from hydrocarbon exploration to advanced materials, are in focus as they plan to set up India’s largest data centre cluster in Andhra Pradesh.
With a market capitalization of Rs. 18,71,550.11 crores in the day’s trade, the shares of Reliance Industries Ltd jumped upto 1.59 percent, making a high of Rs. 1,387.80 per share compared to its previous closing price of Rs. 1,365.95 per share.
What Happened
Reliance Industries (RIL) plans to invest ₹1.6 lakh crore (over $17 billion) to develop a 1.5-gigawatt data centre cluster along with a captive solar battery storage system in Visakhapatnam, Andhra Pradesh. The project is set to become India’s largest data centre cluster, surpassing Google’s 1-GW project in the same region. The Andhra Pradesh Investment Promotion Committee recently approved the investment.
The “giga-scale AI data centre cluster” will be developed in three phases across 935 acres, 300 acres for the first phase, 635 for the second, along with 1 acre for a cable landing station and 80 acres for a desalination plant.
In the first phase, RIL will establish a 500 MW data centre in Polipalli village, expected to begin commercial operations by October 2028. The second phase will add another 1 GW of capacity, completing the full 1.5-gigawatt cluster.
Data Centre Boom in Visakhapatnam
Visakhapatnam is emerging as a key hub for data centres, with significant investments planned in the Bhogapuram East and West regions by 2030. The cluster will be strategically located near the city’s new airport at Bhogapuram.
Major Investments Announced
- Google: $15 billion investment in a 1 GW data centre cluster, officially launching on Tuesday.
- Sify: 500 MW data centre project.
- Digital Connexion: 1 GW project in the pipeline.
- Anant Raj Cloud: Approximately 300 MW capacity planned.
- RMZ: 1 GW project under MoU.
- Tillman Global Holdings: 300 MW project under MoU.
Andhra Pradesh’s Data Centre Goals
In September 2025, IT Minister Nara Lokesh stated that the state is targeting a total hosting capacity of 6 GW. With the proposed RIL project and other MoUs, the state is close to achieving a combined capacity of 5.6 GW.
State Incentives under Data Centre Policy 4.0
To encourage investments, Andhra Pradesh offers multiple incentives:
- 100% State GST reimbursement on capital goods.
- 10% capital subsidy on machinery.
- Deemed distribution licences for direct energy procurement for projects with at least 300 MW capacity.
Financials & Others
The company’s revenue rose by 12.50 percent from Rs. 261,388 crores in March 2024 to Rs. 294,059 crores in March 2025. Meanwhile, Net profit declined from Rs. 22,611 crores to Rs. 20,589 crores in the same period.
The company demonstrates a return on capital employed (ROCE) of 10.5% and a return on equity (ROE) of 9.25%, indicating efficient use of both capital and shareholders’ funds. With a debt-to-equity ratio of 0.44, its financial leverage is moderate, reflecting a balanced approach between debt financing and equity.
Conclusion
With massive investments from global and domestic players, strong state incentives, and a strategic location near Bhogapuram airport, Andhra Pradesh has the foundation to become a major tech hub. The rapid expansion of data centres is creating the infrastructure needed to attract more IT and cloud businesses.
Coupled with RIL’s renewable energy projects, ensuring reliable power, the state is addressing one of the biggest challenges for large-scale data operations. If these trends continue, Andhra Pradesh could soon emerge as a key technology and digital services destination in India.
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