IndusInd Bank Lends ₹2,500 Crore to I Squared-Backed Lightstorm

Lightstorm Telecom Connectivity Pvt. Ltd, a network infrastructure company backed by private equity firm I Squared Capital, secured a ₹2,500 crore ($260 million) long-term debt facility from IndusInd Bank to expand its data centre connectivity network, co-founder and group CEO Amajit Gupta told Mint.

The fully underwritten 10-year facility will fund terrestrial and subsea fibre projects connecting Indian data centre clusters with regional hubs, Gupta said. Lightstorm will deploy the capital to build network infrastructure across India's southern corridor and expand its I-2SEA subsea cable system to Southeast Asia, Japan, and the US.

The company started domestic operations in 2020 with over 5,000 kilometres of fibre connecting seven data centres. It now operates more than 30,000 kilometres of terrestrial fibre and 21,000 kilometres of subsea fibre, linking over 100 data centres globally. Lightstorm delivers connectivity through Polarin, a network-as-a-service platform that lets enterprises, hyperscalers, and AI infrastructure providers provision and monitor global connectivity on demand.

Initial capital deployment will follow project milestones over a 12 to 18-month build-out period. Domestic network corridors get the first funds; the subsea cable segment requires capital over the next 24 to 36 months.

The debt facility rebalances Lightstorm's capital structure after five years of minimal debt use. The agreement provides flexibility to roll up an existing, largely undrawn ₹700 crore credit line from the National Investment and Infrastructure Fund, taken in February 2025.

Gupta said internal cash flows could support 20-25% annual revenue growth. The decision to raise debt was driven by capital structure optimisation and the need to invest ahead of the artificial intelligence demand curve.

Lightstorm's external debt-to-PBILDT ratio stood at 1.06x as of December-end 2025, compared to 2.46x as of March-end the same year, according to a March 19 report by CareEdge Ratings. The report added that "higher-than-expected debt-funded capex that weakens leverage will remain a key rating monitorable".

India's data centre build-out is accelerating. Over the past 12 months, domestic conglomerates, Big Tech firms such as Google, Amazon, Microsoft and Meta, and standalone operators have committed over $250 billion to build new capacity nationwide. Research by proptech company Square Yards found that India generates nearly 20% of the world's digital data yet accounts for only 4% of global data centre capacity. The country's capacity could reach 7-8 gigawatts by 2035 if announced projects are fully realised.

CareEdge said Lightstorm's total operating income grew 78% year-on-year to ₹589 crore in the first nine months of FY26. PBILDT margin improved to roughly 56.8% in the same period from 37.8% in FY25, aided by operating leverage. CareEdge "anticipates operating profitability to remain healthy as network utilization improves".

With capital being deployed, Lightstorm targets internal rates of return in the high teens, Gupta said.

Moneycontrol reported on March 4 that I Squared Capital was weighing a 20% stake sale in a digital infra platform at up to $1.5 billion valuation. Gupta told Mint that "there is no sell-down which is happening". Asked about a public market debut, he said "an initial public offering is definitely one of the options, we don't have any confirmed timeline as of now".

The connectivity industry is highly competitive, with established players such as Tata Communications Ltd and Bharti Airtel Ltd already holding significant terrestrial and undersea cable capacity.