A $2.5 Billion Opportunity Is Building Behind India’s Data Centres

We talk about data centers in terms of power and compute. How many megawatts are available? How many GPUs can fit in a rack?

But power alone is not enough. It is only half the story. The other half, often invisible to outsiders, is cooling.

Cooling determines whether that power can be used effectively. It determines whether racks run at 100% utilization or throttle under thermal stress. And as AI workloads drive heat densities far beyond historical norms, cooling is moving from engineering detail to boardroom issue.

Let’s break it down.
For a long time, cooling was treated as a background layer inside the data centre stack. Necessary, but not strategic. That mindset is now changing. As AI clusters become denser, as hyperscalers build larger campuses, and as uptime requirements become stricter, cooling is becoming one of the most important enabling layers of digital infrastructure.

That is why the next big opportunity in India’s data-centre story may not be only the data centre itself. It may be the cooling ecosystem behind it.

India’s growth here is now too big to ignore. According to the government, India’s data-centre capacity has increased from about 375 MW in 2020 to around 1,500 MW by 2025. Colliers estimates installed capacity at 1,263 MW as of April 2025 and expects it to cross 4,500 MW by 2030, with $20 to $25 billion of investment likely over the next 5 to 6 years.

That means India is not just adding servers.

It is adding an entire thermal management opportunity behind those servers.
And this is exactly where cooling becomes a serious theme.

A recent Financial Express report said India’s data-centre capacity has expanded about fourfold since 2020 to roughly 1.5 GW and could reach 3 to 3.5 GW in 4 to 5 years. Based on that scale-up, S&P Global Ratings estimated cooling and thermal management alone could become a $2 billion to $2.5 billion capex opportunity.

This is where the biggest value migration may happen.

Because the cooling market is not just about selling more machines. It is about selling more sophisticated systems.

In lower-density environments, traditional air cooling can still do the job. But in AI-heavy environments, the requirement is shifting toward solutions that can handle far greater heat intensity without compromising efficiency. This is why liquid cooling is becoming one of the most-watched segments in the market. It is not replacing air overnight, but it is clearly becoming the premium growth layer of next-generation data centre infrastructure.

List of Companies to track in the Data Centre Cooling theme

Blue Star Ltd: Blue Star is one of the more direct names here. It is already strong in central air-conditioning, chillers and commercial cooling, which makes it relevant as data centre cooling demand rises. Its strength is not just equipment, but system design and project execution.

Voltas Ltd: Voltas is seen mainly as a room-AC company, but its projects business also matters. Management has identified data centres and district cooling as key opportunities, where the company can participate through chillers, piping, ducting and broader MEP execution.

Amber Enterprises Ltd: Amber is more of a manufacturing ecosystem play than a front-end cooling brand. As India localises more of the cooling supply chain, demand for components, assemblies and specialized subsystems can rise, which makes Amber an indirect but important player.

Aeroflex Industries Ltd: Aeroflex is an interesting niche entrant. It has entered high-performance liquid cooling solutions for data centres and has already made its first commercial dispatch of flow-control components and skid assemblies. This gives it exposure to a more specialized part of the market.

KSB Ltd: KSB is a second-order play on this theme. As liquid cooling and circulating thermal systems grow, pumps become critical, and KSB has already indicated data centres as an opportunity across multiple pump categories, including cooling pumps.

KRN Heat Exchanger Ltd: KRN sits in the component layer of the story. Heat exchangers are a key part of thermal management, so while it is not a direct data centre cooling company, it can benefit as cooling infrastructure demand expands.

Thermax Ltd: Thermax brings process engineering and energy-system capability. As data centre cooling becomes more integrated with efficiency and sustainability goals.

Shree Refrigerations Ltd: The company tied up with Smardt Chillers to sell, install, and service oil-free chillers for Indian data centres through its subsidiary Trezor Technologies. Management said this vertical could become 10 to 15% of revenue over three years.

📌Disclaimer: Not a buy/sell recommendation. For educational purposes only. Do your own research.