INDBANK.NS WACC - Weighted Average Cost of Capital

The WACC of Indbank Merchant Banking Services Ltd (INDBANK.NS) is 9.4%.

The Cost of Equity of Indbank Merchant Banking Services Ltd (INDBANK.NS) is 13.35%.

The Cost of Debt of Indbank Merchant Banking Services Ltd (INDBANK.NS) is 7.50%.

	Range	Selected
Cost of equity	11.50% - 15.20%	13.35%
Tax rate	24.80% - 29.80%	27.30%
Cost of debt	7.50% - 7.50%	7.50%
WACC	8.6% - 10.2%	9.4%

WACC

INDBANK.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.56	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	15.20%

Tax rate	24.80%	29.80%
Debt/Equity ratio	1	1
Cost of debt	7.50%	7.50%

After-tax WACC	8.6%	10.2%


Selected WACC	9.4%

INDBANK.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 INDBANK.NS:

cost_of_equity (13.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.56) + 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.