RELINFRA.NS WACC - Weighted Average Cost of Capital

The WACC of Reliance Infrastructure Ltd (RELINFRA.NS) is 15.1%.

The Cost of Equity of Reliance Infrastructure Ltd (RELINFRA.NS) is 18.50%.

The Cost of Debt of Reliance Infrastructure Ltd (RELINFRA.NS) is 9.30%.

	Range	Selected
Cost of equity	16.30% - 20.70%	18.50%
Tax rate	2.20% - 4.30%	3.25%
Cost of debt	7.80% - 10.80%	9.30%
WACC	13.2% - 17.0%	15.1%

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	1.13	1.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.30%	20.70%

Tax rate	2.20%	4.30%
Debt/Equity ratio	0.56	0.56
Cost of debt	7.80%	10.80%

After-tax WACC	13.2%	17.0%


Selected WACC	15.1%

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 (18.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.13) + 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.