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  1. 041Estimate the annual power bill of a data centre with 20 MW of IT capacity, running at 70% utilisation, with a power usage effectiveness (PUE) of 1.4 and a tariff of Rs 7 per kWh.Market sizing and estimationHardInfrastructure fund

    Try it first

    Which is closest to the yearly bill?

    Show the worked solution

    About Rs 120 crore a year. 20 MW at 70% use is 14 MW of IT load. A PUE of 1.4 means the site draws 1.4 times that for cooling and losses, 19.6 MW. Running all year, 19.6 MW times 8,760 hours is about 171.7 million kWh. At Rs 7 a kWh that is about Rs 1,202 million, or Rs 120 crore. The tariff is an assumption to check.

    What does PUE add to the bill?

    A home air conditioner does not just cool the room; it also uses power to run its own compressor and fan. Power usage effectivenessTotal power drawn by the whole facility divided by the power used by the IT equipment alone. 1.0 would mean no overhead at all. is total site power divided by IT power, so a PUE of 1.4 means every 1 MW of servers needs another 0.4 MW for cooling, power conversion and lighting. Here that is 5.6 MW on top of 14 MW of IT load, and the bill pays for all 19.6.

    From megawatts to rupees: four multiplications20 MWIT capacity14 MWx 70% used19.6 MWx PUE 1.4171.7m kWhx 8,760 hoursRs 120 crx Rs 7 per kWhWhere the 19.6 MW goesIT equipment 14.0 MWcooling, losses 5.6PUE = total power / IT power = 19.6 / 14 = 1.4Units: 1 MW running for 1 hour = 1,000 kWh. Rs 1 crore = Rs 10 million.Rs 7 x 171.7 million kWh = Rs 1,202 million = Rs 120.2 crore. The tariff is an assumption to confirm.
    20 MW of IT capacity at 70% use draws 19.6 MW once a PUE of 1.4 adds cooling and losses, which over 8,760 hours is 171.7 million kWh and about Rs 120 crore a year at an assumed Rs 7 per kWh.

    How do you keep the units straight out loud?

    Convert once, early, and say it. One megawatt running for one hour is 1,000 kWh, so 19.6 MW for a year is 19.6 x 8,760 x 1,000, about 171.7 million kWh. Then price it: Rs 7 times 171.7 million is about Rs 1,202 million. A crore is ten million, so divide by ten: Rs 120 crore. Most wrong answers to this question are right in method and a factor of ten off in units.

    The relationship
    Bill=C×u×PUE×8760×1000×p=20×0.7×1.4×8760×1000×7\text{Bill} = C \times u \times PUE \times 8760 \times 1000 \times p = 20 \times 0.7 \times 1.4 \times 8760 \times 1000 \times 7
    CIT capacity, 20 MW
    uutilisation, 70%
    PUEtotal power over IT power, 1.4
    ptariff, Rs 7 per kWh, an assumption
    What it says in wordsMultiply the power actually drawn by the hours in a year, convert to kWh, and price it.

    Now the investor's view. Power is usually the largest running cost of a data centre, so PUE is an economic number, not a technical one: improving it from 1.4 to 1.3 saves about Rs 8.6 crore a year here. Many colocation contracts pass power through to tenants, which shifts who bears the tariff risk. Ask how the contracts treat power before you treat the bill as the owner's cost.

    Where candidates lose it

    The common loss is a factor of ten in the units: candidates convert MW to kWh correctly and then slip between million and crore, landing at Rs 12 crore or Rs 1,200 crore. Say each conversion out loud.

    The second loss is pricing only the IT load and forgetting the PUE, which understates the bill by 40% and misses the point of the question.

    What the interviewer asks next

    • What tariff would make the bill Rs 150 crore?
    • If utilisation rises to 90%, what happens to the bill and to the PUE?
    • In a colocation contract, who usually pays for power, and why does that matter to the investor?
  2. 065Size the annual revenue pool of private dental clinics in an Indian metro of 1.2 crore people. Then say what share of it a rollup of 60 clinics could hold.Market sizing and estimationHardIndian mid-market PEMid-market buyout fund

    Try it first

    On these assumptions, roughly what share of private visits could 60 clinics handle?

    Show the worked solution

    About Rs 720 crore a year, of which 60 clinics could hold roughly 7.5%. Take 25% of 1.2 crore people seeing a dentist, 2 visits each and 80% of visits at private clinics: 48 lakh visits. At Rs 1,500 a visit that is Rs 720 crore. Sixty clinics at 20 visits a day for 300 days handle 3.6 lakh visits, about Rs 54 crore of revenue. Every input is an assumption to be tested.

    Why build the market from visits rather than from spend per person?

    Think of sizing the market for haircuts. Average spend per person hides the fact that some people go monthly and others never; counting the people who go, how often, and what one cut costs is easier to defend line by line. A visit-based tree gives you inputs you can each test separately, and it produces the same unit, visits, that a clinic's capacity is measured in. That second point is why it suits a rollup question: the market and the business are counted in the same currency.

    Size the pool from patients and visits, then lay one clinic's capacity against itPeople in the metro1.2 crorex 25% visit a dentist30 lakhx 2 visits each60 lakhx 80% private48 lakh visitsx Rs 1,500 a visitRs 720 croreOne rollup of 60 clinics against 48 lakh private visits a year60 clinics: 3.6 lakh visits, 7.5%Everyone else: 44.4 lakhCapacity of one clinic20 visits a day x 300 days = 6,000x Rs 1,500 = Rs 90 lakh revenue a clinic60 clinics: about Rs 54 crore a yearSupply-side check48 lakh / 300 days = 16,000 visits a dayAbout 1,067 small clinics at 15 a dayCount clinics locally to test it
    A metro of 1.2 crore people produces about 48 lakh private dental visits a year on these assumptions, worth about Rs 720 crore at Rs 1,500 a visit, and 60 clinics doing 6,000 visits each would handle 7.5% of them, about Rs 54 crore of revenue.

    How do you test the demand side against supply?

    Turn the visits into clinics and see if the number feels right. Forty eight lakh visits over 300 working days is 16,000 visits a day; at 15 a day for a small single-dentist clinic, that is about 1,067 clinic-equivalents. If a local count found far more or far fewer clinics than that, one of the demand assumptions is wrong, most likely the share who visit or the fee. Say that you would check it with a street count in two or three neighbourhoods before trusting the total.

    InputAssumptionResult
    Population1.2 crore
    Share who visit a dentist in a year25%30 lakh patients
    Visits per patient260 lakh visits
    Share at private clinics80%48 lakh visits
    Average revenue per visitRs 1,500Rs 720 crore
    60-clinic rollup capacity6,000 visits each7.5% share
    Each line is an assumption to be tested; together they give about Rs 720 crore of private clinic revenue and a 7.5% capacity share for a 60-clinic rollup.

    What does the share tell a buyout investor?

    It frames the thesis. At about 7.5%, the rollup would be the largest single brand in a fragmented market without needing to win most patients, which is the shape a rollup thesis wants. The limits matter as much: the fee per visit blends cheap check-ups with expensive implants, so a chain that skews to higher-value treatment could earn more from the same visits, and capacity is not demand. Sixty clinics only reach 3.6 lakh visits if patients actually come.

    Where candidates lose it

    Candidates often multiply the whole population by an annual spend and get a number they cannot defend, or forget that many visits happen at government hospitals and charitable clinics, which a private chain cannot capture.

    The second miss is stopping at the market size. The question asks for the rollup's share, which needs one clinic's capacity stated in the same unit as the market.

    What the interviewer asks next

    • Implants are 10% of visits but half of revenue. How does that change the sizing?
    • How would you test the 25% visit rate without any published data?
    • What would make you worry that 60 clinics cannot fill their chairs?