ICRA.NS WACC - Weighted Average Cost of Capital

The WACC of ICRA Ltd (ICRA.NS) is 12.3%.

The Cost of Equity of ICRA Ltd (ICRA.NS) is 12.35%.

The Cost of Debt of ICRA Ltd (ICRA.NS) is 9.55%.

	Range	Selected
Cost of equity	10.80% - 13.90%	12.35%
Tax rate	25.00% - 25.70%	25.35%
Cost of debt	7.50% - 11.60%	9.55%
WACC	10.8% - 13.9%	12.3%

WACC

ICRA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.47	0.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.80%	13.90%

Tax rate	25.00%	25.70%
Debt/Equity ratio	0	0
Cost of debt	7.50%	11.60%

After-tax WACC	10.8%	13.9%


Selected WACC	12.3%

ICRA.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 ICRA.NS:

cost_of_equity (12.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.47) + 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.