GMRINFRA.NS WACC - Weighted Average Cost of Capital

The WACC of GMR Infrastructure Ltd (GMRINFRA.NS) is 12.9%.

The Cost of Equity of GMR Infrastructure Ltd (GMRINFRA.NS) is 12.65%.

The Cost of Debt of GMR Infrastructure Ltd (GMRINFRA.NS) is 17.05%.

	Range	Selected
Cost of equity	11.20% - 14.10%	12.65%
Tax rate	17.40% - 22.70%	20.05%
Cost of debt	10.20% - 23.90%	17.05%
WACC	10.3% - 15.5%	12.9%

WACC

GMRINFRA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.52	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	14.10%

Tax rate	17.40%	22.70%
Debt/Equity ratio	0.46	0.46
Cost of debt	10.20%	23.90%

After-tax WACC	10.3%	15.5%


Selected WACC	12.9%

GMRINFRA.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 GMRINFRA.NS:

cost_of_equity (12.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.52) + 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.