IDFCFIRSTB.NS
IDFC First Bank Ltd
Price:  
77.25 
INR
Volume:  
37,592,040.00
India | Banks
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IDFCFIRSTB.NS WACC - Weighted Average Cost of Capital

The WACC of IDFC First Bank Ltd (IDFCFIRSTB.NS) is 11.9%.

The Cost of Equity of IDFC First Bank Ltd (IDFCFIRSTB.NS) is 17.85%.
The Cost of Debt of IDFC First Bank Ltd (IDFCFIRSTB.NS) is 5.00%.

Range Selected
Cost of equity 15.70% - 20.00% 17.85%
Tax rate 22.30% - 24.00% 23.15%
Cost of debt 5.00% - 5.00% 5.00%
WACC 10.7% - 13.2% 11.9%
WACC

IDFCFIRSTB.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 1.07 1.31
Additional risk adjustments 0.0% 0.5%
Cost of equity 15.70% 20.00%
Tax rate 22.30% 24.00%
Debt/Equity ratio 0.73 0.73
Cost of debt 5.00% 5.00%
After-tax WACC 10.7% 13.2%
Selected WACC 11.9%

IDFCFIRSTB.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 IDFCFIRSTB.NS:

cost_of_equity (17.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.07) + 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.