JINDALSTEL.NS WACC - Weighted Average Cost of Capital

The WACC of Jindal Steel And Power Ltd (JINDALSTEL.NS) is 16.0%.

The Cost of Equity of Jindal Steel And Power Ltd (JINDALSTEL.NS) is 17.20%.

The Cost of Debt of Jindal Steel And Power Ltd (JINDALSTEL.NS) is 10.25%.

	Range	Selected
Cost of equity	15.40% - 19.00%	17.20%
Tax rate	25.20% - 27.20%	26.20%
Cost of debt	9.10% - 11.40%	10.25%
WACC	14.3% - 17.7%	16.0%

WACC

JINDALSTEL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.03	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.40%	19.00%

Tax rate	25.20%	27.20%
Debt/Equity ratio	0.15	0.15
Cost of debt	9.10%	11.40%

After-tax WACC	14.3%	17.7%


Selected WACC	16.0%

JINDALSTEL.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 JINDALSTEL.NS:

cost_of_equity (17.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.03) + 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.