RPOWER.NS WACC - Weighted Average Cost of Capital
The WACC of Reliance Power Ltd (RPOWER.NS) is 14.7%.
| Range | Selected | |
| Cost of equity | 17.2% - 21.8% | 19.5% |
| Tax rate | 4.4% - 7.2% | 5.8% |
| Cost of debt | 6.4% - 15.4% | 10.9% |
| WACC | 11.5% - 18.0% | 14.7% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.24 | 1.5 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 17.2% | 21.8% |
| Tax rate | 4.4% | 7.2% |
| Debt/Equity ratio | 1.05 | 1.05 |
| Cost of debt | 6.4% | 15.4% |
| After-tax WACC | 11.5% | 18.0% |
| Selected WACC | 14.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RPOWER.NS | Reliance Power Ltd | 1.05 | 1.99 | 1 |
| 532874.BO | Suryachakra Power Corp Ltd | 3.42 | 0.82 | 0.19 |
| 600780.SS | Top Energy Company Ltd Shanxi | 0.07 | 1.24 | 1.17 |
| ADANIPOWER.NS | Adani Power Ltd | 0.17 | 0.56 | 0.48 |
| GIPCL.NS | Gujarat Industries Power Company Ltd | 0.2 | 1.88 | 1.58 |
| JSWENERGY.NS | JSW Energy Ltd | 0.37 | 0.95 | 0.7 |
| NLCINDIA.NS | NLC India Ltd | 0.67 | 1.64 | 1.01 |
| NTPC.NS | NTPC Ltd | 0.73 | 1.09 | 0.64 |
| PTC.NS | PTC India Ltd | 0.83 | 1.42 | 0.8 |
| RTNPOWER.NS | RattanIndia Power Ltd | 0.58 | 0.84 | 0.54 |
| Low | High | |
| Unlevered beta | 0.68 | 0.88 |
| Relevered beta | 1.36 | 1.75 |
| Adjusted relevered beta | 1.24 | 1.5 |
RPOWER.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 RPOWER.NS:
cost_of_equity (19.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.24) + 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.