RELINFRA.NS WACC - Weighted Average Cost of Capital

The WACC of Reliance Infrastructure Ltd (RELINFRA.NS) is 17.3%.

The Cost of Equity of Reliance Infrastructure Ltd (RELINFRA.NS) is 20.85%.

The Cost of Debt of Reliance Infrastructure Ltd (RELINFRA.NS) is 14.35%.

	Range	Selected
Cost of equity	18.30% - 23.40%	20.85%
Tax rate	4.80% - 5.90%	5.35%
Cost of debt	10.10% - 18.60%	14.35%
WACC	14.0% - 20.5%	17.3%

WACC

RELINFRA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.38	1.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.30%	23.40%

Tax rate	4.80%	5.90%
Debt/Equity ratio	0.98	0.98
Cost of debt	10.10%	18.60%

After-tax WACC	14.0%	20.5%


Selected WACC	17.3%

RELINFRA.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 RELINFRA.NS:

cost_of_equity (20.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.38) + 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.