ISEC.NS
ICICI Securities Ltd
Price:  
892.25 
INR
Volume:  
5,383,172
India | Capital Markets

ISEC.NS WACC - Weighted Average Cost of Capital

The WACC of ICICI Securities Ltd (ISEC.NS) is 14.3%.

The Cost of Equity of ICICI Securities Ltd (ISEC.NS) is 17.45%.
The Cost of Debt of ICICI Securities Ltd (ISEC.NS) is 12.1%.

RangeSelected
Cost of equity15.7% - 19.2%17.45%
Tax rate25.4% - 25.5%25.45%
Cost of debt10.0% - 14.2%12.1%
WACC12.7% - 16.0%14.3%
WACC

ISEC.NS WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta1.061.22
Additional risk adjustments0.0%0.5%
Cost of equity15.7%19.2%
Tax rate25.4%25.5%
Debt/Equity ratio
0.580.58
Cost of debt10.0%14.2%
After-tax WACC12.7%16.0%
Selected WACC14.3%

ISEC.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 ISEC.NS:

cost_of_equity (17.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.06) + 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.