SIFY
Sify Technologies Ltd
Price:  
5.02 
USD
Volume:  
41,643.00
India | Diversified Telecommunication Services
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SIFY WACC - Weighted Average Cost of Capital

The WACC of Sify Technologies Ltd (SIFY) is 7.9%.

The Cost of Equity of Sify Technologies Ltd (SIFY) is 7.70%.
The Cost of Debt of Sify Technologies Ltd (SIFY) is 11.15%.

Range Selected
Cost of equity 5.50% - 9.90% 7.70%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 9.90% - 12.40% 11.15%
WACC 6.3% - 9.5% 7.9%
WACC

SIFY WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.36 0.91
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.50% 9.90%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.83 0.83
Cost of debt 9.90% 12.40%
After-tax WACC 6.3% 9.5%
Selected WACC 7.9%

SIFY'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 SIFY:

cost_of_equity (7.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.36) + 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.