INDOWIND.NS WACC - Weighted Average Cost of Capital

The WACC of Indowind Energy Ltd (INDOWIND.NS) is 12.6%.

The Cost of Equity of Indowind Energy Ltd (INDOWIND.NS) is 14.50%.

The Cost of Debt of Indowind Energy Ltd (INDOWIND.NS) is 6.30%.

	Range	Selected
Cost of equity	12.50% - 16.50%	14.50%
Tax rate	14.90% - 21.50%	18.20%
Cost of debt	4.00% - 8.60%	6.30%
WACC	10.7% - 14.6%	12.6%

WACC

INDOWIND.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.68	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	16.50%

Tax rate	14.90%	21.50%
Debt/Equity ratio	0.25	0.25
Cost of debt	4.00%	8.60%

After-tax WACC	10.7%	14.6%


Selected WACC	12.6%

INDOWIND.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 INDOWIND.NS:

cost_of_equity (14.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.68) + 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.