IGPL.NS WACC - Weighted Average Cost of Capital

The WACC of I G Petrochemicals Ltd (IGPL.NS) is 15.4%.

The Cost of Equity of I G Petrochemicals Ltd (IGPL.NS) is 17.80%.

The Cost of Debt of I G Petrochemicals Ltd (IGPL.NS) is 7.90%.

	Range	Selected
Cost of equity	16.50% - 19.10%	17.80%
Tax rate	25.70% - 25.90%	25.80%
Cost of debt	7.90% - 7.90%	7.90%
WACC	14.3% - 16.4%	15.4%

WACC

IGPL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.16	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.50%	19.10%

Tax rate	25.70%	25.90%
Debt/Equity ratio	0.26	0.26
Cost of debt	7.90%	7.90%

After-tax WACC	14.3%	16.4%


Selected WACC	15.4%

IGPL.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 IGPL.NS:

cost_of_equity (17.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.16) + 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.