ADANIGREEN.NS WACC - Weighted Average Cost of Capital

The WACC of Adani Green Energy Ltd (ADANIGREEN.NS) is 13.5%.

The Cost of Equity of Adani Green Energy Ltd (ADANIGREEN.NS) is 15.50%.

The Cost of Debt of Adani Green Energy Ltd (ADANIGREEN.NS) is 10.95%.

	Range	Selected
Cost of equity	12.70% - 18.30%	15.50%
Tax rate	13.50% - 20.60%	17.05%
Cost of debt	9.80% - 12.10%	10.95%
WACC	11.4% - 15.6%	13.5%

WACC

ADANIGREEN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.7	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.70%	18.30%

Tax rate	13.50%	20.60%
Debt/Equity ratio	0.46	0.46
Cost of debt	9.80%	12.10%

After-tax WACC	11.4%	15.6%


Selected WACC	13.5%

ADANIGREEN.NS's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for ADANIGREEN.NS:

cost_of_equity (15.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.7) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.