POWERGRID.NS
Power Grid Corporation of India Ltd
Price:  
289.75 
INR
Volume:  
21,788,566.00
India | Electric Utilities
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POWERGRID.NS WACC - Weighted Average Cost of Capital

The WACC of Power Grid Corporation of India Ltd (POWERGRID.NS) is 13.7%.

The Cost of Equity of Power Grid Corporation of India Ltd (POWERGRID.NS) is 17.05%.
The Cost of Debt of Power Grid Corporation of India Ltd (POWERGRID.NS) is 7.70%.

Range Selected
Cost of equity 14.70% - 19.40% 17.05%
Tax rate 14.80% - 18.40% 16.60%
Cost of debt 6.30% - 9.10% 7.70%
WACC 11.7% - 15.6% 13.7%
WACC

POWERGRID.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.95 1.24
Additional risk adjustments 0.0% 0.5%
Cost of equity 14.70% 19.40%
Tax rate 14.80% 18.40%
Debt/Equity ratio 0.47 0.47
Cost of debt 6.30% 9.10%
After-tax WACC 11.7% 15.6%
Selected WACC 13.7%

POWERGRID.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 POWERGRID.NS:

cost_of_equity (17.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.95) + 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.