Axis Bank to double data center loans, riding on India's AI push

India's Axis Bank Ltd. plans to double its exposure to data centers over the next three years, a top executive said, as the nation's artificial intelligence push spurs investment in digital infrastructure. The country's third-largest private-sector lender by assets has financed about a dozen data center clients and its exposure to the sector is a little over 2% of its corporate loan book, according to Vijay Mulbagal, the bank's group head of wholesale banking coverage. That would amount to more than Rs 8,688 crore ($907 million), based on the bank's first-quarter earnings data. "Data-related investments in India are growing," Mulbagal said in an interview. "The growth is strong and companies have to resort to borrowings apart from bringing in equity to be able to meet their ambition of larger capacities." Beyond India, Axis has also approached data center companies based in Singapore about potential financing opportunities, Mulbagal said. Global demand for AI computing capacity has accelerated, fueling a race to build large-scale data centers. The sector accounted for more than a fifth of the value of global greenfield projects in 2025, with announced investments exceeding $270 billion, according to the United Nations Conference on Trade and Development. India's AI and data center push is opening up a new pool of lending opportunities for banks as developers turn to debt alongside equity to fund capital-intensive projects. An estimated $90 billion investment opportunity could emerge across India's data center value chain by fiscal year 2035, extending beyond capacity additions into related infrastructure and services, according to a KPMG report. India is seeking to strengthen its position as a data center hub. It plans to offer a 20-year tax holiday to foreign companies that provide global data center services from the country amid growing opposition to such infrastructure in the US and elsewhere. Banking on the nation's drive, Indian billionaires are plowing money into the sector. Gautam Adani is set to invest $100 billion in AI-ready data centers by 2035 and Mukesh Ambani's conglomerate plans to pour in as much as $110 billion over seven years into AI-related infrastructure. But the lending opportunities come with risks. Data centers require vast amounts of power, water and land, making projects vulnerable to infrastructure bottlenecks and rising costs. Protests also trigger delays, with residents in Thane, Mumbai's neighboring district, rallying against Amazon's proposed data center there, according to a local media report. Beyond data centers, Axis Bank is seeing credit demand from sectors including energy transition, digital infrastructure and commercial real estate, according to Mulbagal. Axis Bank ranks behind private-sector rivals including HDFC Bank Ltd. and ICICI Bank Ltd. by assets, and is seeking to expand its lending to sectors expected to benefit from India's investment cycle. But it's the biggest among Indian banks in arranging local currency bond sales, according to data compiled by Bloomberg.