SETL Proposed to Acquire Majority Stake in GScale Energy Private Limited, Marking Its Strategic Entry into AI Datacenter Engineering

Standard Engineering Technology Limited (SETL) (BSE: 544333), India's leading precision and multidisciplinary engineering company, today announced the acquisition of a majority stake in M/s. GScale Energy Private Limited, a company specializing in AI Datacenter Engineering infrastructure.

SETL proposed to acquire upto 51% shareholding in GScale Energy Private Limited through a combination of primary capital infusion and a strategic share-swap arrangement with existing shareholders, committing approximately ₹190 Crore for this Phase I investment. As part of a broader phased program, SETL has approved a total investment of approximately ₹500 Crore to be deployed across equity acquisition, capacity expansion and working capital for the combined business, entirely self-funded from the Company's cash flows.

Looking ahead to FY2027, we remain confident in the underlying strength of our core engineering business. Based on our current order pipeline, customer engagements, and ongoing growth initiatives, management is targeting approximately 40-50% revenue growth in our existing operations, subject to prevailing market conditions and execution outcomes.

The acquisition marks an important milestone in SETL's engineering expansion strategy, extending its decade-long expertise in concept-to-commissioning engineering solutions built serving the pharmaceutical, chemical, and biotechnology industries - into the rapidly growing AI Datacenter sector. India's AI and hyperscale Datacenter infrastructure market is projected to require approximately US $20-25 billion of investment through 2030, and SETL intends to be a leading engineering partner in this build-out.

While GScale Energy will continue to be led by its founder and leadership team, SETL will provide strategic guidance, capital, and access to its manufacturing scale and integrated execution capability - combining GScale's specialized Datacenter domain expertise with SETL's engineering depth to deliver complete, end-to-end AI Datacenter solutions, from power and cooling infrastructure to precision fabrication, automation, and commissioning.

Commenting on the acquisition, Mr. Nageswara Rao Kandula, Managing Director, Standard Engineering Technology Limited, 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 and Mr. Kasu Brahma Reddy's leadership, we are building a platform to deliver complete, concept-to-commissioning AI Datacenter solutions at scale."

Mr. Kasu Brahma Reddy, Founder & Director of GScale Energy Private Limited, 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 Datacenter Engineering solutions for India's next generation of digital infrastructure."

GScale Energy, led by Mr. Kasu Brahma Reddy - a 25+ year veteran of the Datacenter industry and former President of CtrlS Datacenters Limited, one of India's largest Datacenter businesses already possesses approximately 4 lakh square feet of operational infrastructure, with a target to scale to 10 lakh square feet by FY2028 through phased expansion.

SETL's entry into this sector is being executed from a position of financial strength. The Company reported FY2026 revenue of approximately ₹793 Crore with an EBITDA margin of approximately 17.4%, holds approximately ₹220 Crore in cash and liquid assets, and was upgraded to a CRISIL rating of A/Positive in April 2026 - with the entire investment program funded through internal accruals and no new borrowings.

Through our newly established AI infrastructure engineering platform - GScale Energy Private Limited - we are entering an exciting and high-potential segment. As manufacturing operations are expected to commence from November 2026, FY2027 will effectively capture only approximately four months of contribution from this business. Within this initial operating window, management is targeting revenue in the range of ₹250 crore from this vertical, subject to project execution timelines and customer schedules.

The acquisition strengthens SETL's position at the intersection of precision engineering and next-generation digital infrastructure, combining its manufacturing depth and integrated execution capability with GScale's specialized expertise - positioning the combined platform to capture high-growth demand as India accelerates its AI and hyperscale Datacenter build-out.

We believe this marks only the beginning of a significant long-term opportunity. As capacity scales and customer relationships deepen, we are committed to building a technology-driven, high-quality engineering platform that delivers sustainable value to our customers and shareholders.

Source : Equity Bulls

Keywords

StandardEngineeringTechnology SETL MajorityStake Acquisition GScaleEnergy