IFBAGRO.NS
IFB Agro Industries Ltd
Price:  
537.75 
INR
Volume:  
5,221
India | Beverages

IFBAGRO.NS WACC - Weighted Average Cost of Capital

The WACC of IFB Agro Industries Ltd (IFBAGRO.NS) is 14.6%.

The Cost of Equity of IFB Agro Industries Ltd (IFBAGRO.NS) is 14.8%.
The Cost of Debt of IFB Agro Industries Ltd (IFBAGRO.NS) is 10.05%.

RangeSelected
Cost of equity13.5% - 16.1%14.8%
Tax rate22.1% - 23.8%22.95%
Cost of debt7.5% - 12.6%10.05%
WACC13.3% - 16.0%14.6%
WACC

IFBAGRO.NS WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta0.80.89
Additional risk adjustments0.0%0.5%
Cost of equity13.5%16.1%
Tax rate22.1%23.8%
Debt/Equity ratio
0.020.02
Cost of debt7.5%12.6%
After-tax WACC13.3%16.0%
Selected WACC14.6%

IFBAGRO.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 IFBAGRO.NS:

cost_of_equity (14.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.8) + 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.