GSPL.NS WACC - Weighted Average Cost of Capital

The WACC of Gujarat State Petronet Ltd (GSPL.NS) is 13.7%.

The Cost of Equity of Gujarat State Petronet Ltd (GSPL.NS) is 13.75%.

The Cost of Debt of Gujarat State Petronet Ltd (GSPL.NS) is 7.30%.

	Range	Selected
Cost of equity	12.00% - 15.50%	13.75%
Tax rate	25.20% - 25.40%	25.30%
Cost of debt	7.10% - 7.50%	7.30%
WACC	11.9% - 15.5%	13.7%

WACC

GSPL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.62	0.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.00%	15.50%

Tax rate	25.20%	25.40%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.10%	7.50%

After-tax WACC	11.9%	15.5%


Selected WACC	13.7%

GSPL.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 GSPL.NS:

cost_of_equity (13.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.62) + 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.