GSPL.NS
Gujarat State Petronet Ltd
Price:  
331.95 
INR
Volume:  
613,427.00
India | Gas Utilities
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GSPL.NS WACC - Weighted Average Cost of Capital

The WACC of Gujarat State Petronet Ltd (GSPL.NS) is 13.6%.

The Cost of Equity of Gujarat State Petronet Ltd (GSPL.NS) is 13.70%.
The Cost of Debt of Gujarat State Petronet Ltd (GSPL.NS) is 8.15%.

Range Selected
Cost of equity 11.70% - 15.70% 13.70%
Tax rate 24.80% - 25.20% 25.00%
Cost of debt 7.50% - 8.80% 8.15%
WACC 11.7% - 15.6% 13.6%
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 0.59 0.84
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.70% 15.70%
Tax rate 24.80% 25.20%
Debt/Equity ratio 0.01 0.01
Cost of debt 7.50% 8.80%
After-tax WACC 11.7% 15.6%
Selected WACC 13.6%

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 (13.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.59) + 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.