IIFL.NS WACC - Weighted Average Cost of Capital
The WACC of IIFL Finance Ltd (IIFL.NS) is 7.6%.
| Range | Selected | |
| Cost of equity | 15.7% - 20.0% | 17.85% |
| Tax rate | 23.5% - 23.8% | 23.65% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.1% - 8.2% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.07 | 1.3 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 15.7% | 20.0% |
| Tax rate | 23.5% | 23.8% |
| Debt/Equity ratio | 2.68 | 2.68 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.1% | 8.2% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IIFL.NS | IIFL Finance Ltd | 2.68 | 1.53 | 0.5 |
| 511533.BO | Sahara Housingfina Corporation Ltd | 1.67 | 1.2 | 0.53 |
| 530979.BO | India Home Loan Ltd | 0.86 | 0.38 | 0.23 |
| 539017.BO | Akme Star Housing Finance Ltd | 1.03 | 0.53 | 0.29 |
| AAVAS.NS | Aavas Financiers Ltd | 0.88 | 0.26 | 0.16 |
| CANFINHOME.NS | Can Fin Homes Ltd | 3.18 | 1.39 | 0.41 |
| GICHSGFIN.NS | GIC Housing Finance Ltd | 8.41 | 1.33 | 0.18 |
| HOMEFIRST.NS | Home First Finance Company India Ltd | 0.79 | 0.96 | 0.6 |
| PNBHOUSING.NS | PNB Housing Finance Ltd | 1.98 | 1.15 | 0.46 |
| RHFL.NS | Reliance Home Finance Ltd | 0.57 | 0.87 | 0.6 |
| Low | High | |
| Unlevered beta | 0.36 | 0.48 |
| Relevered beta | 1.1 | 1.45 |
| Adjusted relevered beta | 1.07 | 1.3 |
IIFL.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 IIFL.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.