VIPIND.NS WACC - Weighted Average Cost of Capital

The WACC of V I P Industries Ltd (VIPIND.NS) is 13.4%.

The Cost of Equity of V I P Industries Ltd (VIPIND.NS) is 14.70%.

The Cost of Debt of V I P Industries Ltd (VIPIND.NS) is 8.95%.

	Range	Selected
Cost of equity	12.50% - 16.90%	14.70%
Tax rate	22.40% - 23.30%	22.85%
Cost of debt	7.00% - 10.90%	8.95%
WACC	11.4% - 15.5%	13.4%

WACC

VIPIND.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.68	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	16.90%

Tax rate	22.40%	23.30%
Debt/Equity ratio	0.2	0.2
Cost of debt	7.00%	10.90%

After-tax WACC	11.4%	15.5%


Selected WACC	13.4%

VIPIND.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 VIPIND.NS:

cost_of_equity (14.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.68) + 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.