GAIL.NS WACC - Weighted Average Cost of Capital

The WACC of GAIL (India) Ltd (GAIL.NS) is 14.6%.

The Cost of Equity of GAIL (India) Ltd (GAIL.NS) is 16.00%.

The Cost of Debt of GAIL (India) Ltd (GAIL.NS) is 8.60%.

	Range	Selected
Cost of equity	13.90% - 18.10%	16.00%
Tax rate	21.00% - 21.90%	21.45%
Cost of debt	7.60% - 9.60%	8.60%
WACC	12.8% - 16.5%	14.6%

WACC

GAIL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.85	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.90%	18.10%

Tax rate	21.00%	21.90%
Debt/Equity ratio	0.17	0.17
Cost of debt	7.60%	9.60%

After-tax WACC	12.8%	16.5%


Selected WACC	14.6%

GAIL.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 GAIL.NS:

cost_of_equity (16.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.85) + 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.