The Data Centre (DC) is used to store the database for customer’s related services like banking, IT sectors and share marketing etc. In order to accomplish the scheduled tasks and manipulate the bushiness hours effectively Data Centre (DC) needs uninterrupted power supply (UPS). The major types of equipment of DC are UPS, chiller or PAC, Precision Air Handling Unit (PAHU) or Air Handling Unit (AHU) etc. While these types of equipment come into operation they are adversely affected by power quality problem particularly from voltage sag. If the voltage magnitude during the voltage sag exceeds the low voltage tolerance limits, the sensing device in the UPS system senses the input voltage with respect to tolerance limit and it turns ON the battery mode. Under battery mode condition the Data Centre (DC) gets rated voltage continuously and work is carried out without power interruption. When the incoming supply voltage is resumed back to its rated value UPS systems turns off the battery mode and turns on the normal supply mode. This is how the Data Centre (DC) is effectively compensated by UPS. But in the case of chiller PQ problem caused by voltage sag is not compensated. If the voltage sag events continue, the under-voltage relay trips the power input and data centre equipment get to turn off. Hence the room temperatures of DC will abruptly increase and causing data center failure. In order to figure out the problems in data centre caused by power quality i.e. voltage sag, the PQ assessment was carried out at DIGSILENT power factory in Bengaluru, India connected with 11 kV Ring Main Unit (RMU) for four days between 22/9/2017 to 25/9/2017. About 36 voltage sag events and 4 interruptions were captured and the highest temperature inside the DC hall was also recorded. This paper discusses the techno-economical location for installing the DSTATCOM to enhance the power quality during voltage sag event for the data centre (DC). Dranetz Power Guide 4400 Power Quality Analyzer (PQA) has been used for PQ assessment and carried out at DIGSILENT power factory