INDI.L WACC - Weighted Average Cost of Capital
The WACC of Indus Gas Ltd (INDI.L) is 8.0%.
| Range | Selected | |
| Cost of equity | 72.9% - 166.6% | 119.75% |
| Tax rate | 31.3% - 39.5% | 35.4% |
| Cost of debt | 4.0% - 15.8% | 9.9% |
| WACC | 3.9% - 12.1% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 11.53 | 23.16 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 72.9% | 166.6% |
| Tax rate | 31.3% | 39.5% |
| Debt/Equity ratio | 61.34 | 61.34 |
| Cost of debt | 4.0% | 15.8% |
| After-tax WACC | 3.9% | 12.1% |
| Selected WACC | 8.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| INDI.L | Indus Gas Ltd | 61.34 | 0.76 | 0.02 |
| JOG.L | Jersey Oil and Gas PLC | 0 | 1.72 | 1.71 |
| LFDE.PA | La Francaise de l Energie SA | 0.16 | 0.93 | 0.84 |
| PANR.L | Pantheon Resources PLC | 0.03 | -0.12 | -0.12 |
| PGR.L | Phoenix Global Resources PLC | 1.74 | 0.48 | 0.23 |
| PMG.L | Parkmead Group PLC | 0.08 | 1.48 | 1.41 |
| RKH.L | Rockhopper Exploration PLC | 0 | 1.67 | 1.67 |
| SAVE.L | Savannah Energy PLC | 3.91 | 0.5 | 0.14 |
| TRIN.L | Trinity Exploration and Production PLC | 0.12 | 0.94 | 0.88 |
| ZOE.L | Zoetic International PLC | 0.01 | 0.55 | 0.54 |
| Low | High | |
| Unlevered beta | 0.42 | 0.85 |
| Relevered beta | 16.72 | 34.07 |
| Adjusted relevered beta | 11.53 | 23.16 |
INDI.L'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 INDI.L:
cost_of_equity (119.75%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (11.53) + 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.