NHPC.NS
NHPC Ltd
Price:  
89.31 
INR
Volume:  
17,973,782.00
India | Independent Power and Renewable Electricity Producers
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NHPC.NS WACC - Weighted Average Cost of Capital

The WACC of NHPC Ltd (NHPC.NS) is 13.1%.

The Cost of Equity of NHPC Ltd (NHPC.NS) is 15.40%.
The Cost of Debt of NHPC Ltd (NHPC.NS) is 8.55%.

Range Selected
Cost of equity 12.90% - 17.90% 15.40%
Tax rate 16.20% - 19.30% 17.75%
Cost of debt 6.60% - 10.50% 8.55%
WACC 10.9% - 15.4% 13.1%
WACC

NHPC.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.72 1.07
Additional risk adjustments 0.0% 0.5%
Cost of equity 12.90% 17.90%
Tax rate 16.20% 19.30%
Debt/Equity ratio 0.36 0.36
Cost of debt 6.60% 10.50%
After-tax WACC 10.9% 15.4%
Selected WACC 13.1%

NHPC.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 NHPC.NS:

cost_of_equity (15.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.72) + 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.