HGINFRA.NS WACC - Weighted Average Cost of Capital

The WACC of HG Infra Engineering Ltd (Part IX) (HGINFRA.NS) is 15.6%.

The Cost of Equity of HG Infra Engineering Ltd (Part IX) (HGINFRA.NS) is 17.00%.

The Cost of Debt of HG Infra Engineering Ltd (Part IX) (HGINFRA.NS) is 11.30%.

	Range	Selected
Cost of equity	14.00% - 20.00%	17.00%
Tax rate	26.00% - 26.60%	26.30%
Cost of debt	8.10% - 14.50%	11.30%
WACC	12.7% - 18.5%	15.6%

WACC

HGINFRA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.86	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.00%	20.00%

Tax rate	26.00%	26.60%
Debt/Equity ratio	0.19	0.19
Cost of debt	8.10%	14.50%

After-tax WACC	12.7%	18.5%


Selected WACC	15.6%

HGINFRA.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 HGINFRA.NS:

cost_of_equity (17.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.86) + 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.