Macquarie Capital invests $100 mn in India’s CloudExtel

The corporate advisory of capital markets, and principal investment arm of Macquarie Group, Macquarie Capital has acquired a majority stake in Network as a Service (NaaS) provider Excel Telesonic India Private Limited (CloudExtel).

“As India embraces a digitalised economy coupled with the shift towards 5G, the growth in mobile usage and demand for data capacity is accelerating the deployment of digital infrastructure. CloudExtel’s solutions for telecom operators, internet service providers, data centres, enterprises and large content providers equip them with cost-effective futureproof networks,” said Macquarie in its press release.

Though the official press release did not mention the details of the deal, Mint reported that Macquarie Capital had bought CloudExtel for about $100 million (about ₹821 crores).

Quoting Kunal Bajaj, chief executive and co-founder of CloudExtel, Mint reported that Macquarie has picked a substantial majority stake (51%) in the company and will have a seat on the board, while the shareholding of the previous owner, Bombay Gas Company Ltd will be reduced to a minority. CloudExtel was a unit of Bombay Gas Company.

CloudExtel’s management will remain unchanged post the deal though the workforce count is expected to rise from 350 to about 1000 over the next five years, the report added.

The demand for internet data via mobile networks has risen 20-fold since 2015 in India. Adequate infrastructure to decongest networks and enhance connectivity is necessary for a high-quality user experience. Furthermore, tower fabrication in India stands at 33 per cent, versus around 70 per cent in mature global markets. Enterprise and household fibre penetration is even lower. These gaps depict the opportunities ahead for CloudExtel, said Bajaj in the official press release.

“We’re talking about volume increases at the order of magnitude of 10. So, from 4,500 small cell sites today to 45,000 sites in the next five years. We plan on growing to over 35,000 route kilometres of last-mile access fibre, across the country,” Bajaj said. Moneycontrol