Standard Engineering Technology Ltd (SETL), a precision and multi-disciplinary engineering company, has announced the acquisition of a majority stake in GScale Energy Pvt Ltd, marking its entry into the rapidly growing AI data centre infrastructure segment.
The company proposes to acquire up to 51% shareholding in GScale Energy through a combination of primary capital infusion and a strategic share-swap arrangement with existing shareholders. SETL will invest approximately ₹190 crore in Phase I of the transaction.
As part of a broader phased growth programme, SETL has approved a total investment of around ₹500 crore across equity acquisition, capacity expansion and working capital requirements for the combined business. The entire investment will be funded through internal accruals, without any new borrowings.
Expanding into AI data centre infrastructure
The acquisition represents a strategic diversification for SETL, extending its concept-to-commissioning engineering capabilities beyond the pharmaceutical, chemical and biotechnology sectors into AI and hyperscale data centre infrastructure.
India’s AI and hyperscale data centre market is expected to attract investments of approximately $20-25 billion through 2030, creating significant opportunities for engineering and infrastructure companies. Through the acquisition, SETL aims to establish itself as a key engineering partner in this emerging sector.
While GScale Energy will continue to be led by its existing founder and leadership team, SETL will provide strategic direction, capital support and access to its manufacturing capabilities. The combined platform will offer end-to-end AI data centre engineering solutions spanning power and cooling infrastructure, precision fabrication, automation and commissioning services.
Management targets strong growth
For FY2027, SETL management is targeting revenue growth of 40-50% in its existing operations, supported by its current order pipeline, customer engagements and growth initiatives, subject to market conditions and execution timelines.
Manufacturing operations for the new vertical are expected to commence from November 2026. As a result, FY2027 will capture only about four months of contribution from the business. Within this period, management is targeting revenue of around ₹250 crore from the AI data centre segment, subject to project execution schedules and customer requirements.
GScale plans capacity expansion
GScale Energy, led by Kasu Brahma Reddy, a 25-year veteran of the data centre industry and former President of CtrlS Datacenters Ltd, currently has approximately 4 lakh sq ft of operational infrastructure.
The company plans to scale this footprint to 10 lakh sq ft by FY2028 through a phased expansion strategy.
Financial strength supports investment
SETL said its expansion into AI data centres is being undertaken from a position of financial strength. The company reported revenue of approximately ₹793 crore in FY2026 with an EBITDA margin of around 17.4%.
It also holds around ₹220 crore in cash and liquid assets. In April 2026, the company’s credit rating was upgraded to CRISIL A/Positive.
Management comments
SETL Managing Director Nageswara Rao Kandula said, “This investment is the natural evolution of everything SETL has built since 2013. The same precision and integrated execution capability that made us a trusted engineering partner to pharma and chemical companies will now power the datacenters driving the AI revolution. With GScale’s domain expertise, we are building a platform to deliver complete, concept-to-commissioning AI data center solutions at scale.”
GScale Energy Pvt Ltd Founder & Director Kasu Brahma Reddy said, “Joining hands with SETL is a transformative step for GScale. With SETL’s manufacturing scale, financial strength, and engineering depth, we are well positioned to deliver world-class AI data center engineering solutions for India’s next generation of digital infrastructure.”
The acquisition strengthens SETL’s position at the intersection of precision engineering and next-generation digital infrastructure, combining its manufacturing capabilities with GScale’s specialised expertise to address growing demand from India’s AI and hyperscale data centre ecosystem.