ADANIGREEN.NS WACC - Weighted Average Cost of Capital

The WACC of Adani Green Energy Ltd (ADANIGREEN.NS) is 12.3%.

The Cost of Equity of Adani Green Energy Ltd (ADANIGREEN.NS) is 12.75%.

The Cost of Debt of Adani Green Energy Ltd (ADANIGREEN.NS) is 13.70%.

	Range	Selected
Cost of equity	11.20% - 14.30%	12.75%
Tax rate	11.70% - 19.10%	15.40%
Cost of debt	8.80% - 18.60%	13.70%
WACC	10.1% - 14.6%	12.3%

WACC

ADANIGREEN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.52	0.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	14.30%

Tax rate	11.70%	19.10%
Debt/Equity ratio	0.49	0.49
Cost of debt	8.80%	18.60%

After-tax WACC	10.1%	14.6%


Selected WACC	12.3%

ADANIGREEN.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 ADANIGREEN.NS:

cost_of_equity (12.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.52) + 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.