INDOWIND.NS WACC - Weighted Average Cost of Capital

The WACC of Indowind Energy Ltd (INDOWIND.NS) is 12.4%.

The Cost of Equity of Indowind Energy Ltd (INDOWIND.NS) is 14.20%.

The Cost of Debt of Indowind Energy Ltd (INDOWIND.NS) is 7.00%.

	Range	Selected
Cost of equity	12.00% - 16.40%	14.20%
Tax rate	24.60% - 44.00%	34.30%
Cost of debt	4.00% - 10.00%	7.00%
WACC	10.3% - 14.4%	12.4%

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	0.62	0.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.00%	16.40%

Tax rate	24.60%	44.00%
Debt/Equity ratio	0.23	0.23
Cost of debt	4.00%	10.00%

After-tax WACC	10.3%	14.4%


Selected WACC	12.4%

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 (14.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.62) + 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.